If you are a business owner, you may wonder how you can protect assets that you have earned from litigious types. There are a couple of different ways that you can protect assets if you own a business, and one of them would be through the creation of a limited liability company.
With a limited liability company, the actions of the company would not be connected to your personal property. Property that is in your personal possession could not be attached if there was a legal judgment against the company.
In addition to the above, you also enjoy something called flow-through taxation. Though you enjoy the asset protection benefits of a company, when it comes to taxes, you can continue to claim your profits or losses on your individual tax return when you have a limited liability company.
You have to avoid fraudulent conveyances. If you create a limited liability company after you find out that you are the target of a lawsuit in an effort to protect assets, this could be construed as an illegal act called a fraudulent conveyance.
This is a very basic explanation, but if you would like to learn more about how you can protect assets with a limited liability company, we have a valuable resource that will answer all of your questions. Our firm has prepared a report on the value of limited liability companies, and it is being offered free of charge right now. You can visit this page to access your copy: Free Report on Limited Liability Companies.
Family Limited Partnerships
If you are looking for other ways to protect assets, you could consider the creation of a family limited partnership. Let’s explain the value of a family limited partnership by way of example. Suppose you are a physician, and you are concerned about potential malpractice actions. You are also a real estate investor, and you own an apartment building.
You could place the apartment building into a family limited partnership. As the person creating the partnership, you would act as the general partner, so you would control the actions of the partnership. Family members of your choosing would act as limited partners.
Your personal property would not be in play if someone was to get injured in your apartment building and sue, because the litigant would be suing the partnership that held the rental property. Plus, property in the partnership could not be attached if any individual partner was to face personal legal actions.
We also have an in-depth report on family limited partnerships. To get your copy of the free report, click this link: Special Report on Family Limited Partnerships.
Obtain Legal Guidance
If you would like to discuss asset protection planning with an experienced estate planning, send us a message through our contact page to request a consultation: Sacramento CA Asset Protection Attorneys.