1 / 39

FLP For Asset Protection?

FLP For Asset Protection?. Gen. Partner. Family Ltd. Partnership. Assets. Typically Is FLP Creator, Contributes The Assets, May Be A Married Couple. Ltd. Liability Shield. Ltd. Partners. FLP For Asset Protection?. Gen. Partner. Family Ltd. Partnership. Assets. Ltd. Liability Shield.

sakina
Télécharger la présentation

FLP For Asset Protection?

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. FLP For Asset Protection? Gen. Partner Family Ltd. Partnership Assets Typically Is FLP Creator, Contributes The Assets, May Be A Married Couple Ltd. Liability Shield Ltd. Partners

  2. FLP For Asset Protection? Gen. Partner Family Ltd. Partnership Assets Ltd. Liability Shield Personal Legal Attack, Resulting In Judgment Ltd. Partners Creditor (1 Eye Monster)

  3. FLP For Asset Protection? Gen. Partner Family Ltd. Partnership Assets Ltd. Liability Shield Personal Legal Attack, = Charging Order Ltd. Partners = Lien or Garnishment On Distributions Of Affected Partner

  4. FLP For Asset Protection? Gen. Partner Family Ltd. Partnership Assets K-1 Ltd. Liability Shield $0.00, + Tax Liability = Hot Potato Ltd. Partners Creditor (1 Eye Monster)

  5. FLP For Asset Protection? Theory of the K-1 Hot Potato Effect is Enhanced With These Results… • A Creditor w/Charging Order Cannot: • Reach Partnership Assets • Manage The Partnership or Vote • Control Cash Flow Or Force Distributions • Cause Partnership Liquidation

  6. FLP For Asset Protection? Creditor, In Reality, Is Not Shut Out! • Because The General Partner Cannot: • Make Distributions to Some Partners WhileWithholding Distributions to The Partner Who Has The Charging Order * • Withhold Distributions Period, Without Legitimate Business or Investment Purpose * • Therefore, In Many Or Most Cases the Creditor Will Be Able to Force Distributions To Accompany The K-1…. Or, All Partners Are Tied Up – Stalemate! • * See The Cutting Edge Handout

  7. FLP For Asset Protection? Creditor, In Reality, Is Not Shut Out! Even If The General Partner Could Withhold The Creditor’s Distributions, While Paying Other Partners, • The Charging Order Partner Definitely Cannot Receive Distributions of Income or Capital • If The FLP Forming Partners (Clients) Receive a Charging Order, They Have No Asset Protection! • The Promoter’s Claims Are Not Valid

  8. FLP For Asset Protection? And, The Creditor May Very Well Pay The Taxes! • Taxes To Pay May Be Small In Comparison to Judgment Amount • May Be No Taxes At All, If FLP Assets Are Primarily Capital Growth • Paying The Taxes Probably Is A Good Investment, Ultimately Creditor Will Receive Corresponding Capital and Growth On It • The Promoter’s Claims Are Not Valid

  9. FLP For Asset Protection? • Other Limitations And Issues: • General Partners Must Give Away (98%?) Interests To Protect Assets Which They Contribute To FLP • No Protection For Non-FLP Assets, For Any Partner • California Effectively Eliminated Charging Orders for LLCs On 1/1/2004, Allowing Membership Interest Liquidation For Creditor (FLPs and Other States Not Far Behind?) • And, You Have To Question Competence Of Anyone Not At Least Recommending A Limited FLP or LLC

  10. FLP For Asset Protection? What About Legal Attacks On The Partnership? Gen. Partner Family Ltd. Partnership Assets Ltd. Liability Shield Ltd. Partners

  11. FLP For Asset Protection? What About Legal Attacks On The Partnership? Gen. Partner Family Ltd. Partnership Assets For This Case, Charging Order Is Useless For Partnership Assets and General Partner’s Non FLP Assets. Only Ltd. Partners Are Protected. Ltd. Liability Shield Ltd. Partners

  12. FLP For Asset Protection? • General Problems and Issues: • To Improve Protection, Should Use Outside Partners • Must Avoid Personal Usage, Alter Ego Problems • FLP Must Be Run As A Business • Court Can Sell Interest, Even Dissolve FLP • Limit on Asset Type, All Must Have Biz Purpose • Statutory Action Is All In the Trust Arena • If The FLP Worked For Asset Protection, NAFEP Would Support That. We Do Create FLPs For Proper Usage.

  13. If Not For Asset Protection,Then What Is FLP Purpose? Family Ltd. Partnership Gen. Partner Assets • FLPs Make An Excellent Income and Estate Tax Planning Vehicle • Very Useful For Managing Family’s Income Producing Assets Ltd. Liability Shield Ltd. Partners

  14. FLP For Asset Protection? • Source\Reference Material For FLPs: • The Cutting Edge, Published By Leimberg Associates, Inc. www.leimbergservices.com, $60.00 • Asset Protection, By Peter Spero, Published By Warren Gorham Lamont (WGL-RIA), Division of Thomson Tax & Accounting Company • Tools and Techniques of Estate Planning, By (Many Authors), Published By National Underwriter Co., $64.95, www.nationalunderwriter.com

  15. Getting Rid of Myths Business Directed Legal Attacks This Is Not Asset Protection: Limited Liability Co. Personal & Property Directed Legal Attacks Ltd. Liability Shield LLC Owner LLC Units Assets

  16. Getting Rid of Myths Asset Directed Legal Attacks This Is Not Asset Protection: Revocable Living Trust Assets Personal Legal Attacks

  17. Your Assets Without a Life Estate Trust Your Assets With a Life Estate Trust EARNED INCOME HOUSE (Some Protection in Some States) VACATION HOUSE AUTOMOBILES OFFICE BUILDING RENTAL PROPERTY CASH/SAVINGS EARNED INCOME HOUSE (Some State Protection & Full Protection in Trust) VACATION HOUSE AUTOMOBILES OFFICE BUILDING RENTAL PROPERTY CASH/SAVINGS

  18. Your Assets Without a Life Estate Trust Your Assets With a Life Estate Trust ANNUITIES INVESTMENTS INVESTMENT INCOME LIFE INSURANCE CASH VALUE PENSIONS-PROFIT SHARING / 401K IRA / 403 B (Protection in Some States) ANNUITIES INVESTMENTS INVESTMENT INCOME (Protected After April 15th of Each Year if Left in Trust) LIFE INSURANCE CASH VALUE PENSIONS-PROFIT SHARING / 401K IRA / 403B (Protection in Some States)

  19. Asset Protection Support Materials • The Preceding PowerPoint Presentation w/Script • Automated Presentation (Answers To Life’s Financial Risks) • Answer’s Booklet, Paralleling Above Presentations, Excellent Study Guide at Seminars, Client Handout • Color, Bi-Fold Brochure, Client Handout • Asset Protection Legal Package, For Client’s Counsel

More Related