Question for life gurus

[Macdaddy]

There is an ongoing case in the suburban Phgiladelphia, PA area (the Main Line----a very wealthy area) of an attorney who refuses to divulge where his assets are as part of a divorce settlement. He has been held in contempt and has resided in the county jail since 2000. He is still there and still stubbornly refuses to divulge the information. I believe he has set a record for the longest serving person incarcerated for contempt of court. Now there is a guy who sticks to his principles. I think the case is in the courts of Delaware County, PA.

Just like the IRS, which I consider to be like the Mob or the Mafia, I can be 100% "in the right", but I ain't going to fight them boys! Being right is not enough.

 

[somarco]

Another outstanding resource.

 

[arnguy]

A most interesting aspect of my job when I was with the IRS was investigating businesses where the owners were using "trust fund" taxes that were deducted from the employees (withheld income tax and 1/2 of the FICA/Medicare withholding) operating capital. They thought that being incorporated would protect them from any individual responsibility and liability. The interesting part was to be able to "pierce the corporate veil" and impose the liability against the de facto officers---it is called the 100% Penalty. Boy, were they surprised when this liability was imposed on them personally!

 

[trvlnut]

One of the things you can do is title your assets in seperate companies. I use LLCs. For instance my home is titled in a Delaware LLC. My bank and brokerage accounts in a seperate Delaware LLC. These LLCs can have your wife as being the 99% member/owner and you 1%, yet you can be the manager of the LLC, therefore you have full control of the assets.

The goal with asset protection is to make it as difficult as possible for someone to be able to attach to your assets. If all your assets are titled in companies, things become very messy. The goal (IMO) is NOT to defraud a creditor! ....but rather put you in a position of strenth to settle a claim on more friendly and reasonable terms.

I posed a question about putting my insurance biz in an LLC to protect my personal assets if I'm sued and the responses I received from others on the board that it would be a waste of time and $. I'm still not so sure, how do you feel?

 

[Macdaddy]

I posed a question about putting my insurance biz in an LLC to protect my personal assets if I'm sued and the responses I received from others on the board that it would be a waste of time and $. I'm still not so sure, how do you feel?

I would think that if YOU are the one selling the insurance then YOU are the one that will be liable.

However, placing your assets in other structures can offer you some protection. Fact is, if your assets are easy to discover and garnish then you will be easy prey to a creditor.

The likely best answer for you is to pay for a good E&O policy and write good clean business.

 

[WBunch]

Having been an entreprenuer for 10 years in a number of businesses I have had to learn a little bit about asset protection and practice it in my own life. Knowledge of this has helped me take the extra measures to protect my own assets plus gave me the knowledge on how to structure a lawsuit to go after the assets of a current debtor commercial real estate developer just a little over a month ago. He settled with me before his first response was due to the court.


I am not celebrating yet however. Not until he pays the debt on the payment schedule we have agreed to.

One of the things you can do is title your assets in seperate companies. I use LLCs. For instance my home is titled in a Delaware LLC. My bank and brokerage accounts in a seperate Delaware LLC. These LLCs can have your wife as being the 99% member/owner and you 1%, yet you can be the manager of the LLC, therefore you have full control of the assets.

The goal with asset protection is to make it as difficult as possible for someone to be able to attach to your assets. If all your assets are titled in companies, things become very messy. The goal (IMO) is NOT to defraud a creditor! ....but rather put you in a position of strenth to settle a claim on more friendly and reasonable terms.

If a creditor has to tie you up in court and hire attorneys to work to get at your assets then it will cost him a boat load of $$ and might net him much less money, or even nothing in the end but an attorney bill. He knows this and that is why he would be more likely to settle the claim early with you on your terms.

The downside to doing things this way is you do have to pay those darn LLC renewal fees every year, and opening accounts requires a bunch of paperwork and copies of your LLC operating agreement.

I have done the same but my LLC's are done in Nevada. Nevada has a privacy rule on their member list on LLC paperwork. You don't have to list your name nor do they have to tell anyone. Let an attorny fumble through that mess. My house, boat, car, stocks, and the like all protected.

 

[Crabcake Johnny]

The problem is, an attorney "fumbling through that mess" is just racking up the bill and if you are indeed guilty or liable for something that's just added costs. If you are in a jury trial it's all about appearance. If you have the appearance of "hiding" assets or deliberately making it tough to find what you have a good attorney is going to paint you as a con man in front of the jury.

Let's all remember that trials are not all about the law. Trials are about who appears to be honest, likable or not likable. If we think going to court is all about the law then I'm sure we all know many examples of when it doesn't quite work that way.

 

[David C]

Since we're talking about law I'll share this quote from an old justice of the peace.

You want justice, go to a whorehouse. You want to get screwed, go to the courthouse.

 

[Crabcake Johnny]

Paris Hilton does time, Libby gets a pass. That's all we need to now about justice. Bin Laden is still running around free but we're about to nail Nicole Ritchie!

 

[bluemarlin08]

Libby was never going to jail, Chaney had the fix in from the get go. Paris Hilton going to jail, you think she will stop driving on revoked license? Everything is upside down! Why didn't we stay after Bin Laden till we got him?