Attorneys are doing to give you a lot of different answers to your questions, leaving you more confused than when you went into the office. The reason being is they each have different areas of law, or specialties. Check out some of the most common tools and how to use one tool to get three very important things done.
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29
Aug
2011
How Do I Protect Homes, Cash & Rentals?
What paperwork do I need to protect my assets such as houses cash and some rentals? Dan, Connecticut
It is difficult to protect your home with an entity, because as soon as you take it out of your name you loose many homestead and tax advantages. If you are married you can get some protection by putting your home in your spouses name, however, often a good insurance policy is the best protection. An LLC is a great way to protect rentals from liability. They are great liability shields for rental properties. If you manage your own properties, it is a good idea to form a management LLC.
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16
Aug
2011
Who is the Best Registered Agent?
Who should be the registered agent for my LLC?
The person you choose to be your registered agent is responsible for all the legal and tax documents that come to your company. These include but are not limited to the following:
- Service of Process—which is the paperwork that notifies you of a lawsuit
- State mail — annual reports or statements
- Tax documents
Should you get an IRA? OF COURSE! But which one should you get is the question? The never ending debate has always been between a standard IRA and a Roth IRA. With a Roth IRA, the money you put in gets taxed when you put it in. When you put money in a standard IRA, it gets taxed when you take it out. So you should get the same amount of money right? Forgetting one little detail… Check out the video for details on which one is actually better.
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Years ago I remember reading about a “Marshmallow Experiment,” where Stanford researcher Walter Mischel gave a group of three to five year-olds a choice: Eat one marshmallow now, or wait fifteen minutes and get two marshmallows. The experiment was intended to measure children’s ability to delay gratification.
Mischel found that only 30 percent of the children were able to wait fifteen minutes; most of the children gobbled down the marshmallow before the time was up. As I read this I remember thinking I would have waited. I hated marshmallows.
Mischel followed up with the children and found that as they got older, the children who could delay gratification were more likely to do well in school, have higher SAT scores, and obtain jobs; generally, they were more likely to succeed at life. Low-delayers, however, were more likely to have higher body-mass index measurements later in life, have problems with drug use and generally be less successful overall.
I suspect that people who take care of their estate planning would also have been in the delayed gratification group. They are the same people who do well in school, have higher SAT scores, and obtain jobs; generally, they were more likely to succeed at life. I know this because I see it everyday as I help people complete their estate planning. And just like waiting to eat the marshmallow and getting twice as much. Estate planning helps people get twice as much out of their estates. If you want to be wealthy, act like the wealthy and get your planning done.
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04
Aug
2011
Single or Multi Member LLC?
Should I make my LLC single or multi member? Candy J Utah
It is almost always best to be a multi member LLC . In some states it is essential. If there is more than one member in your LLC, then for legal and tax reasons the property held in the LLC is considered owned by the business. If you are the sole member then the property can be interpreted to be your asset. The Courts and the IRS can come after those assets when you get in trouble. If there are multiple members then those assets are considered property of the business and there will be no claim against them.
There is one slight advantage to a single member LLC. If you are the sole owner of the entity (single member LLC) you can choose to be taxed as a sole proprietor or corporation (C or S). If you are willing to be taxed as a “sole proprietorship,” then you don’t need to get an EIN (Employee Identification Number). You will still operate as an LLC, but it will be a “disregarded entity” in the eyes of the IRS. For tax purposes you will file a Schedule C on your 1040 return, just as if you were a sole proprietor. Yet, you will still have the liability shield of the LLC. The form of taxation has nothing to do with the liability shielding. So for a single member LLC, the taxes are easy and you get the liability shield.
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03
Aug
2011
Living Revocable Trusts and FDIC Bank Insurance
With all the news about the debt ceiling and the stock market in crisis, it is natural to wonder just how safe is the money we hold in bank accounts. This question may be particularly important to for trustees and beneficiaries of Trust accounts.
Most of us know that after the Great Depression, the FDIC (Federal Deposit Insurance Corporation) was formed. It is an independent agency of the United States government that protects bank deposits against the loss if an FDIC-insured bank or savings association fails. The FDIC insurance is backed by the full faith and credit of the United States government. Since the FDIC’s creation in 1933, no depositor has ever lost even one penny of FDIC-insured deposits.
If you deposit money in an FDIC insured institution you will be covered for up to $250,000 of your deposit. It is important to know that if you have more than $250,000, even if it is in separated accounts it usually won’t be covered. For instance, if you have a small business account in addition to your personal account at the same bank, and you have more than $250,000 cumulative in both accounts. Watch out! You are not covered.
You can have more than $250,000 at one insured bank or savings association and still be fully insured provided the accounts meet certain requirements. For instance, if you have a joint account then each person listed on the account can have $250,000. This is where living revocable trusts fit in. A living revocable trust account at an FDIC insured bank can have more than $250,000 as long as it has more than one beneficiary. Each named beneficiary in the living revocable trust is insured up to $250,000 subject to specific limitations and requirements
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26
Jul
2011
How To Protect High Income, Bonuses & Dividends
I am an executive of a start-up company that made me part of the executive management. My income from my position with my salary, bonuses and dividend income from my stock will afford me a mid to high seven figure income per year. I want to protect these assets and any future acquired assets. How can I best achieve this? George M., Florida
You are smart to plan your asset protection ahead of time. There are certain questions you need to consider first. How risky is your business? Are you a detail person? Do you have a family? You are living in a great state to protect your home because Florida has an unlimited homestead provision. It is always a good idea to hold your home in your own name for tax reasons and Florida makes this easy. I recommend that you form a living revocable trust. Depending on your other assets and your family situation you could consider forming a Family Limited Partnership FLP, or a Limited Liability Company (LLC) to hold those assets you want to protect. Planning should include not just liability but also tax considerations and ease of management. I have a “How to Make It and How to Keep It Boot Camp” to help people like you on a personal level.
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20
Jul
2011
How Do I Protect My Assets from Lawsuits?
It is best to get your asset protection take care of well before you get sued, go bankrupt, or have some other type of trouble. Which instruments you use depends of the asset you are trying to protect. Your business should be held in an entity, your home should be held in a trust, rental properties should be held in LLCs.
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