How to Keep Your Money and Other Assets

As a business owner, and/or a wealthy individual, (or both), you already understand that operating and owning a business and/or dealing with the complexities of an increasingly litigious world are overflowing with risks and liabilities. Turning a profit isn’t enough.  You have to protect the money you already have and the money anticipated yet to be made.  You must also protect your business, bank accounts and investments from claims and lawsuits regarding debts of all kinds, including, but not limited to, mortgage obligations to third parties and vendors, claims for damages caused by your employees and your children, a spouse, divorce, product and/or professional liability, and consumer-protection attacks.  These are just some of the probabilities you must successfully navigate. If handled improperly, these perils can result in the loss of your business, financial safety, and personal assets. Knowing what dangers that you face and how to minimize or avoid them provides you a planned opportunity to successfully make and keep your hard-earned money and assets.

The goal of a comprehensive asset protection plan is to prevent or significantly reduce such risks by insulating your business and personal assets from the claims of creditors and attorneys looking to make money off of your efforts.  Unfortunately, many business owners are unaware of all the potential risks that can harm their business, asset base, and the options available to protect themselves.  An asset protection plan employs legal strategies put in place before a lawsuit or claim arises that can deter a potential claimant or prevent the seizure of your assets after a judgement. If you haven’t already put your asset protection plan in place it is time to get it done. It is not prohibitively expensive to put in place.  The longer your plan has been in existence, the stronger it will be to prevent a legal attack.

Strategies used in asset protection planning include a combination of structures such as corporations, partnerships, and trusts.  Strategies also include domestic and foreign decisions and how strong you want your asset protection plan to be.

There are many forms of asset protection, from simple to complex. The best asset protection plan (which is referred to by many as the “bullet proof” plan) is for those who do not want the government, creditors, spouses or attorneys to get their hands on their assets. In my opinion, that is the Cook Islands Asset Protection Trust. This is the ultimate protection. Over the years, it has proven to be an impenetrable wall of asset protection. A solid asset protection strategy can defend you from claims of creditors, give you peace of mind, and protect your assets from lawsuits.

There are also Domestic Asset Protection Trusts, but there are only certain State where they work, and there are limitations not found in other Asset Protection vehicles.

In any event, your asset protection structure depends on your needs. If you are not a person that needs such bullet proof asset protection, but still needs important and helpful asset protections, there are many ways to achieve your goals, but regardless, all of your assets need some kind of protection, such as:

  1. Investments. 
  2. Real Estate.
  3. Vehicles and Equipment.
  4. Cash.
  5. Bank Accounts.
  6. Insurance.
  7. Precious Metals.
  8. Weapons.
  9. Collectibles.
  10. Businesses and Farms.

2. Protecting your kids and grandkids, and their futures — protecting them from themselves
and others;

3. Ensuring your heirs get what you want them to have, when you want them to have it, and
how you want them to get it.

4. And the list goes on.

Strategies for your protection may include one or more of, but not limited to, the following:

  • Use of your Estate Plan and Trust Protections.
  • Protections through Business Entity Formation.
  • Protections through Layering of Business Entities such as LLC’s, Partnerships, Sub-Chapter-S Corporations.


An LLC provides a great deal of flexibility in regard to taxation. An LLC can elect to be taxed as a sole proprietor, partnership, S corporation or C corporation. If the LLC has only a single member, the owner can elect to treat it for income tax purposes as a “disregarded entity.” As a disregarded entity, you do not have to file any tax returns for the LLC. The income and expenses are reported as a sole proprietorship on the personal return. In some states the name(s) of the owner(s) of the LLC are not required when filing the articles of organization, so the LLC allows some degree of anonymous ownership of business interest and property. LLC laws specifically prohibit a lawsuit against the owners (called members) and managers of the LLC for a claim against the business. The LLC shields the owners and managers from personal liability for a lawsuit or debt of the business. It also shields the LLC from the personal debt and liability of the owners. The LLC law also states that this limited liability of the owners and managers is to be enforced, even if the company formalities of minutes and meetings are not followed. The LLC allows the owners to adopt flexible rules regarding the maintenance, administration, and operations of the company

Family Limited Partnership and Limited Liability Limited Partnership

The Family Limited Partnership and the Limited Liability Limited Partnership are legal structures that protect can all your professional and personal assets. They can also prevent lawsuits by making you so unattractive to a plaintiff attorney that they will never pursue a lawsuit against you.

The FLP and LLLP have emerged as a tremendously-powerful tools to hold real estate, equipment, bank accounts, and other assets to protect them against lawsuits. Once your assets are properly structured, you can have the financial peace of mind that comes from knowing you are protected from losing the assets you have worked a lifetime to secure.

Asset protection FLPs and LLLPs contain a clause that enables the general partner to distribute income on a non-pro rata basis, which means they can distribute income to themselves and other limited partners. They also have the ability to exclude distributions to the judgment creditor. As a result, the judgment creditor would receive no assets and no income; and because certain IRS Revenue Rules, the judgment creditor who obtains a charging order against an FLP or LLLP is required to pay taxes on “phantom income,” which is the income of the FLP/LLLP, even if the plaintiff does not receive the income. The result is that the plaintiff does not obtain any assets or income, but is liable for taxes on the income they will never receive. Therefore, the disclosure of properly-drafted FLPs and LLLPs to a prosecuting attorney is a great deterrent to the filing of a lawsuit. Because many of the lawsuits today are taken on a contingency basis, an asset search is one of the first things an attorney does before accepting a case. Placing your assets into properly- drafted legal entities removes the financial incentive of prosecuting attorneys.

Sub-Chapter S Corporation

The primary difference between a “regular” corporation and a subchapter S corporation is the tax treatment. Corporations that have elected to be taxed as a subchapter s corporations are not taxed at the corporate level. Instead, income is allocated to shareholders, who are then taxed at their personal level.

Subchapter S corporations, or S corporations, are corporations that are taxed on a “flow – through” basis. This means that tax liabilities from income (or deductions from losses) are passed onto the corporations’ shareholders to be declared individually.

There are many ways to structure your plan. We will do what is best for you.