Asset Protection in Las Vegas, NV and in all 50 states
Asset Protection
Reportedly, 40 million lawsuits are filed in America every year.
This makes asset protection a high priority for Americans who wants to live well and keep and expand their assets.
Torchlight Tax’s team of EAs, CPAs and Tax Attorneys work together to save your tax dollars and protect your assets so you can create, protect, and increase wealth.
We set up entities such as LLCs, corporations, and trusts to maximize your after-tax profits and protect your assets.
Investors who learn and use these strategies well can significantly and rapidly increase their real estate portfolios.
There are four categories that we will divide your assets into to maximize your asset protection and explain it to you.
- Your personal assets.
- Your business.
- Your safe investments.
- Your risky investments.
Your Personal Assets
This includes your home, your cars, your personal possessions, and your personal savings and checking accounts.
We would put all these personal assets into a living trust. This protects these assets from having to go through Probate Court.
You want to avoid Probate as it takes away control of your assets and gives it to the court system. It can cost a lot of money to your estate and thus your heirs.
When your assets go to Probate Court, it becomes part of the public record. This has disadvantages.
Maybe your son’s ex-wife sees it and her lawyer now wants more alimony.
Maybe one of the children got less than they felt they deserved. Once again, this could trigger a lawsuit.
By going through Probate, you are setting your heirs up for lawsuits.
Now, in a living trust, someone you trust can be put on as the trustee when you pass. There is no public announcement, and the courts are not involved.
A properly drafted trust agreement makes sure your interests are adhered to. Also, the trust agreement is a PRIVATE DOCUMENT. You have given your instructions to the trustee, and he simply sits down and carries out your instructions. Not everybody gets to see it.
It is not easy to file a lawsuit against a trust.
The trust can also have provisions in it to protect the interests of your chosen heirs.
In Probate, an attorney is hired by the court and paid out of your estate. This can get expensive, especially if the will is contested.
The longer Probate goes the more the attorney is paid.
The idea of a living trust is to allow the trustee to handle your instructions with minimum fuss. It can keep your estate out of court, and there is no delay handling your assets. The trustee can pay the house rent and handle the banking and see to the needed repairs on a rental property you own.
If you have an active business, he can make sure the business is kept going and ensure that the successor is on the job and handling matters.
Your Business
Now, in this category, we are talking about an active business that you own (partially or wholly) and work in. This can be a legal practice, a janitorial service, a restaurant, an Uber driver, or any other business.
Now, your business, if it is an LLC or corporation, largely shields you personally from judgements against your business.
It does not generally work in reverse. It does not prevent a lawyer or creditor from coming after your business for your personal debts or judgments. However, it can be set up to do this. You can set up a Wyoming LLC to be the owner of your business.
You no longer own it. You own the LLC.
Your Wyoming LLC can be set up anonymously, meaning your name is not in the public record. Indeed, your name need not be furnished to the Secretary of State of Wyoming when the LLC is formed.
This needs to be done correctly. If you set up the LLC yourself, your name will wind up on the Secretary of State website as the organizer of the LLC, and anyone looking at this website will figure out you set up the LLC and you probably own it. If an attorney sets it up properly, then ownership will be anonymous.
Also, the Wyoming LLC operating agreement must be carefully crafted. Specific clauses must be in the operating agreement, and specific clauses must not be.
Done properly, it can prevent someone who wins a court judgment against you personally from taking your Wyoming Holding LLC. This is because a Wyoming LLC is eligible for Charging Order protection. This means that anyone with a judgment against you cannot take your ownership and assets in the LLC.
If your operating agreement specifies that the only remedy for collecting a judgment against the LLC is through a Charging Order, then they cannot take the LLC or its assets.
The Wyoming LLC and its assets cannot be taken to satisfy the judgement because it has Charging Order Protection.
This is not an absolute guarantee. For example, commingling assets or transferring money out of your company because you expect a lawsuit or one has been filed, could result in a judgement being enforceable. This last is known as a fraudulent transfer.
Now, if you have more than one business, you should probably have more than one LLC or Corporation. If you lump businesses in one LLC/corporation, then an attack on one is an attack on all.
If you have one business that is doing well and another that is being sued or failing spectacularly, and they are in separate LLCs or corporations, you can keep the good business and close the bad one. Your loss in the bad one is limited to whatever you had put into the bad one.
If both businesses are in the same LLC, the good one will be liable for the debts of the bad one.
Safe Investments
Safe investments in this context does not mean they cannot lose money. It just means they are not going to damage your other assets. Simple ownership does not make you legally culpable because you own these.
Bank accounts, money market accounts, stocks, bonds, gold, crypto are in this category. Your trading account is in this category. They are “safe” because the worst thing that can happen to you is you lose them.
You can lose millions in stock or crypto, for example, but if all you did was buy the stock or buy the crypto, you need not worry about being sued for ownership.
These safe investments can be held by a Wyoming LLC. There is no reason to have all these assets tied to your name.
Suppose a lawyer smells “blood in the water “and has a great potential lawsuit against you. He checks your name and discovers you are without assets. The blood scent disappears, and he looks for other prey.
A Wyoming LLC bank account is a good hiding place for excess cash. It is also easy to get back when needed. You just transfer the money.
Risky Investments
Risky investments are risky because they can generate lawsuits. You usually set them up as an LLC in the state they are operating in.
For example: In Florida real estate can be held in a Land Trust. Florida Land trusts have asset protection features like an LLC. They are less expensive to set up and have other financial advantages as well.
Another example: In Texas you can have investments in cells in what is called a series LLC. Maybe you have Texas SuperBig Real Estate LLC as the parent company and separate cells named by the address of the property. Each of these cells has asset protection as if it were a separate LLC, and this saves you money and hassle.
A good procedure is to set up a Wyoming Holding LLC first. Call it something anonymous, e.g. XYZ LLC. Have XYZ LLC be the owner and manager of the state LLCs. Use a virtual address. Make sure NOTHING points back to you.
The Wyoming Holding LLC then sets up the state LLC.
You can have multiple state LLCs owned by a Wyoming Holding LLC. One LLC failing or being hit by a lawsuit does not hurt the Wyoming LLC or the other LLCs. The failed LLC is isolated and any debts or judgements against it are not transferable to other entities.
This is a numbers game. You do not have to be 100% impervious. You must be impervious enough that the lawyer desirous of suing you reviews your on-line data and decides to look for easier targets.
How can you do this?
Well, the first step is do not flaunt your assets.
Maybe you should not be driving a Ferrari. That could be flaunting your wealth.
If you MUST HAVE that Ferrari, LEGALLY GET IT OUT OF YOUR OWN NAME. How can this be done? Well, renting or leasing is one way.
Your Wyoming holding LLC could buy it and lease it to you. (If you put it into LLC, you should have a legitimate business purpose.)
Real Estate Investments
Do you have rental properties? These are ripe for litigation.
Put each rental property in a separate LLC. Now if one is sued and goes down, the others are unaffected. If you had them all in your name, along with your home and your sole proprietorship business, one lawsuit could take everything.
So put the rentals in LLCs. Put as many assets as feasible into your Wyoming LLC. Do not just put your personal-use assets in the LLC. You can put them into an LLC but must do so correctly and cannot use this to hide your income from the IRS.
You could, if you have an expensive personal vehicle or equity in a home to shield, have the LLC own the vehicle or home and rent it out to you.
These strategies are good but must be correctly done. They can get complex.
Also, real estate is a field where asset protection is vital.
There are some amazing strategies in this field to save taxes and protect your assets. They are legal if properly done.
Summary of Steps for Asset Protection
Set up a living trust to ensure all your assets are transferred to your heirs without going through Probate. To do this the assets have to be properly transferred to the living trust.
If you have active businesses, set up each in its own separate LLC. LLCs should be in the state where the business or property is located.
If you have rental properties, set up each in its own separate LLC.
Where feasible, have these LLCs owned and managed by an anonymous Wyoming LLC that your living trust owns.
Make sure all trust documents are correctly done and that all your assets are there.
Make sure all LLC or corporation operating agreements are correctly done and coordinated. There are many, many ways this can be messed up. Online templates and document preparation services are not the way to go. There are so many ways this can be messed up. Your operating agreement can refer to you by the wrong entity type.
Dang! There goes those LLC bank accounts and properties.
My firms (Torchlight and GuardDog Tax) do tax preparation, IRS Representation and Asset Protection. Our Asset Protection Division is headed up by Attorney Jim Daloisio.
Would you like to maximize your tax savings?
Would you like to minimize asset risk?
Would you like to do pro-actively do tax-savings and asset protection planning?
Then contact us for a free consultation.
Call us at 1-877-758-7797 or 702-463-1818 or email us at info@TorchlightTax.com. We can transfer your call to a branch office near you or help you directly from our central office.
Why Torchlight Tax
Upgrade to a full-service Tax Firm
Whether you are filing personal, small business, or corporate taxes, or negotiating IRS tax debt, if you are not already using a professional Tax, Accounting, and IRS Representation firm, you most likely have missed out on major tax benefits. This is because a professional tax and accounting firm utilizes licensed professionals such as Certified Public Accountants (CPAs), EAs and Attorneys, who can not only advise individuals on personal financial matters but who can also advise businesses and corporations of all sizes and types. Tax laws are complicated, and no one knows everything. Torchlight Tax is a team and any one of our tax pros can call on other EAs, CPAs, and Tax Attorneys in the team who may have specialist knowledge in a specific area of tax..
Amendments
When doing current taxes, we often come across missed tax savings from prior years. When this happens, the Internal Revenue Service allows you to amend your taxes and lower your tax liability. Whether you or your prior tax preparer missed a W-2 or 1099, a revised 1099. large charitable donations, or made some other error, amending your tax return can help you recover the money you are rightfully owed. When we find this situation, we will advise you on potential savings and amend the previously filed tax return.
Sometimes, there may be a situation where a tax return could be amended, but it is too late to receive any benefit. Or maybe you made an error that was missed by the IRS that would have increased your tax liability. In some cases, it is prudent to file an amended return. But if it is not necessary and will not save you any money or decrease your risk, we will tell you not to bother. It is silly to amend a return to no advantage which is too old for the IRS to audit. Some firms might file a bunch of unnecessary tax returns and charge a fee. Sometimes a taxpayer himself might increase his tax liability by filing an unnecessary amendment that increases his tax liability. We will not do this.
Amending a tax return requires more professional acumen then doing it right in the first place. At Torchlight Tax, we do file the tax return correctly the first time. And we will happily amend your tax return, but only if it actually is to your benefit. If you think you might need to amend tax returns, contact Torchlight Tax for a free consultation.
