Use the right tools. Asset protection is part art and part science. Certain methods will work. Certain tools are appropriate, while others do not make sense. It is important to have a shrewd professional skilled in asset protection to structure your protection.
If you are located outside of Nevada, be aware of Nevada corporations...they are being viewed more and more as a fraudulent tool, due to abuse and tax fraud. However, if you live primarily in Nevada, and/or do business primarily in Nevada, the Nevada limited liability company or LLC is a great tool for asset protection.
Maintain a legal and legitimate purpose for all asset protection tools, so you can take advantage of the full protection the law affords.
You cannot hide behind assets being transferred to a spouse or children, especially if this transfer happens after liability exposure has occurred.
Just creating a corporation or LLC is not enough. You must carry on your affairs in a legal and non-harmful way, otherwise the "corporate veil can be pierced" by the court rather easily.
Legal tools used rarely afford tax protection. In most cases, the tools used for asset protection are tax neutral...do not try to combine them. Remember, if it sounds too good to be true, it probably is...
Protect you income streams. Many wealthy individuals have fixed income streams they rely on for their livelihood and overhead. If these were eliminated, they would be faced with difficult choices. It is important to protect these streams...educate yourself on options to securitize these forms of income.
Finally...do not attract liability. Keep a low profile. I always say..."live low and laugh all the way to the bank"...this is truly Empowering!
Wednesday, June 10, 2009
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