9. Not using an LLC (or LLP, or LLLP). Limited
Liability Companies (and their cousins, the Limited Liability Partnership, and the Limited Liabil ity Limited Partnership). These have been around for a long while, but are still poorly understood. Let’s face it, you want limited liability, don’t you? You wouldn’t be reading this other wise. What an LLC does is protect your personal assets from claims against your business or real estate (yes, I know a corporation does that, too) AND protects you from losing your business if claims are successfully pressed against you (which a corp can never do—get a judgment, hand over the stock). An LLC seals both ends- and that’s a very big deal.
10. Single member LLC. For the LLC technique discussed in #9 to work, there needs to be more than one owner (LLC owners are called “members”). So make sure your wife or daughter or girlfriend or grandson has a small stake (that has no control or rights to compel in come). And remember, this separate interest must be in their name alone, not joint with you.
11. Waiting until you’re fired upon. Too many people with lots to lose don’t get serious about asset protection planning until they smell a lawsuit, or have already been filed on. All of this stuff works really great if you take the time to plan your defenses in the happy sunshine, before the hordes gather for a dawn attack. Once potential liability appears, all the planning in the world may be deemed a “fraudulent conveyance” sham, and much less effective, or entirely so. So be smart—build that brick house, while the wolf is still at the other pigs’ place.
These are the sort of routine opportunities we uncover for people on a very regular basis. Chances are very good that your business or family could benefit from many of these improvements as well. Of course, there are many other asset protection planning pitfalls we catch that often ensnare successful families, but hopefully these “Big 11” will motivate you to get a comprehensive liability risk checkup Call or email today, before some financial predator starts to huff, and puff.