cssnevada.com entity structuring for privacy and asset protection css nevada - corporate support...

cssnevada.com Entity Structuring for Privacy and Asset Protection

CSS Nevada - Corporate Support Services of Nevada, Inc

Leaders In Providing ENTITY STRUCTURING FOR PRIVACY AND ASSET

PROTECTIONFor Businesses, Individuals and Families

Serving Clients Around The World



Juris Doctor – UCLA School of Law, 1970 Private practice for 20 years Served as Judge Pro Temp for L.A.

Municipal Court



Incorporated in Nevada in 1998 Specializes in entity structuring, asset

protection and customer service One of the fastest growing incorporating

companies in Nevada Doubled in size in the last 12 months Serves as referral source for the Jay Mitton

Asset Protection Seminars, REIS, Investools and Robert Allen Real Estate students



Does everyone want to protect their assets?

Who are the target people? How do you protect your assets? Simple

– “Control everything, own nothing”



Lawsuits Excessive Taxes Probate and Estate Taxes



Tom’s Assets A string of self storage facilities Principal residence Vacation home Automobiles Stocks Personal assets



Bob’s Assets 4 medical clinics Principal residence Horse training and boarding ranch Stocks Art collection Automobiles Personal assets



Currently there are over 100 million lawsuits pending – over 90% in the United States

There are more students in law school than there are practicing attorneys

A business person will be subject to 5 to 7 lawsuits during their career

If you are sued you lose - Even if you are in the right



How do you make yourself safe from lawsuits? Make yourself an unattractive target. Control everything but own nothing!

Or Protect your assets by placing them into an

“asset protection entity.”



What are the “asset protection entities”?

A Limited Partnership (LP) A Limited Liability Company (LLC)

and/or A Land Trust



We are all subjected to excessive taxes – Federal, State, Local, Sales, etc.

How do you reduce your taxes? “Spread” your income among business entities Maximize your deductions – both business and

personal C Corporation is best entity for Taxes



Excessive Taxes Are you concerned about the budget

deficit growing in Washington? Will you and your family have taxable

income above $250,000 per year? Have you structured your assets in such

a way to avoid these new, higher taxes which are sure to happen?



Why do you want to avoid probate? It is expensive and time consuming Public proceeding and cannot save the estate any

taxes It does not permit a married couple to maximize

their transfer tax credits

How to avoid probate? Setup a Living Trust



A Management Entity “C” Corporation

Ownership EntitiesLLC, LP &/or Land Trust

Living Trust

The basic structure everyone should use is:



Why a C corporation as the management entity? Centralized management Limited liability Transferability of stock Tax benefits



C Corporation pays its own taxes Federal corporate tax rate

15% on the 1st $50,000 of taxable income

25% on the next $25,000 34% on the next $25,000 Averages 22.25% on the 1st $100,000 of

taxable income



Assume the management entity is a Nevada corporation which pays no state income taxes.

On the 1st $50,000 of taxable income the corporation will pay a total tax of $7,500.

Assume your combined state and federal tax rate on your top $50,000 of taxable income is 35%.

You will pay a total tax of $17,500.



C corporation provides the greatest benefits (tax free perks) of any business entity

100% Medical Reimbursement Life insurance – up to $50,000 Retirement plan Automobile expenses Education, training and seminars Equipment expenses Business travel



Should be a NV “C” corporation No state income tax Minimal public information Best liability protection for officers & directors Extremely difficult to pierce the “Corporate

Veil” Nevada is the only state in the country which

provides “charging order” protection for the stockholders of a privately held corporation.



Nevada C CorporationIncome - $50,000

Taxes @ 15% $ 7,500

Income - $50,000

Tax Perks -$25,000

Taxable income $25,000

Taxes @ 15% $ 3,750

You – The Individual

Top $50,000 of taxable income

Combined State and Federal Tax Rate – 35%

Total Taxes - $17,500



Limited Liability Company (LLC) Limited Partnership (LP) Land Trusts

Remember - The entity that holds title to the property must be doing business in the state where the property is located



Ownership Entities The ownership entities provide asset

protection for both the entity and the owner.

The ownership entities provide “charging order” protection for the owners.

What is a charging order?



Charging Orders The “charging order” requires the entity to pay

the owner’s profit to the judgment creditor. The judgment creditor has no ownership rights in

the entity. After the creditor’s judgment has been satisfied,

the judgment creditor is out of the picture. The owner has not lost any ownership interest in

the entity. The person entitled to the profits must pay the

taxes on those profits, even if they are not distributed to the person.



Charging Orders There are 3 levels of protection given by the

charging order: The strongest level (Nevada); the weakest level (California); and the middle level (New York)



Charging Order Law The first section of the charging order is almost

identical in all 50 states. It states: “On application to a court of competent

jurisdiction by a judgment creditor of a member, the court may charge the member’s interest with payment of the unsatisfied amount of the judgment with interest. To the extent so charged, the judgment creditor has only the rights of an assignee of the member’s interest.”



Nevada’s Charging Order Protection

Nevada has one of the strongest Charging Orders NRS 86.401 sets forth the charging order for

LLCs in Nevada. It states: “1. … 2. This Section: (a) Provides the exclusive remedy by which a

judgment creditor of a member … may satisfy a judgment out of the member’s interest …”

The Nevada Charging Order protection for limited partnerships is identical.



California’s Charging order Protection

California Corporations Code Section 17302 sets out the Charging Order for CA LLCs. In addition to permitting the charging order, the

statute states (in part): “(a) … The court may appoint a receiver of the

share of the distributions due or to become due to the judgment debtor …”

“(b) A charging order constitutes a lien on the judgment debtor’s assignable membership interest. The court may order a foreclosure on the membership interest subject to the charging order at any time.”

California Corporations Code Section 15907 sets out the identical rules for limited partnerships.



New York’s Charging order Protection

Limited Liability Company Law Section 607 states: “Rights of Creditors of members. (a) On

application … a court may charge the membership interest of the member with payment of the unsatisfied amount of the judgment with interest.

… (b) No creditor of a member shall have any right

to obtain possession of, …; the property of the limited liability company.”



Both the LLC and the LP provide asset protection for the property and the owners

The limited partners are not liable for the debts of the LP

Neither the managers nor members of an LLC are liable for the debts of the LLC

A creditor’s remedy against a member or a limited partner is limited to a “Charging Order.”



Strengths of an LLC Designed to use the strongest features

of corporations and partnerships Neither the members nor managers of an LLC

are liable for the debts of the LLC Creditors of a member are limited to the

“Charging Order” remedy There are no annual meetings required



An LLC is a “pass-through” entity It does not pay its own taxes Taxes paid by the members (owners) Taxpayers have no increased taxes as a

result of using a “pass through” entity The characterization of income (long term

capital gains, etc.) will pass through to the members

Passive real estate losses may be used to offset gains of members



Strengths of a Limited Partnership The limited partnership is one of the safest

entities in which to hold assets The limited partners are not liable for the

debts of the limited partnership There are no annual meetings required



The assets in the limited partnership cannot be seized by a creditor of a limited partner

The creditor is limited to a “charging order” against the limited partnership

The limited partnership has been around since 1916. 90 years of court precedence The only entity which is created pursuant to

(almost) identical statutes in all 50 states Courts know what a limited partnership is and

how it works



Strengths of a Land Trust Easy to form and maintain Does not require filing with the Secretary of

State Does not file a tax return Permits anonymity of ownership Permits transfer of ownership without transfer

taxes or imposition of “due on sales” clause Extremely inexpensive



The entities in which you have direct ownership should be formed in Nevada Strongest charging order in the country Minimal public information No disclosure of members or limited

partners No state income taxes



The entities which hold title to the real estate must be either: Formed in the state where the real estate is

located; or If formed in another state, be legally

authorized to conduct business in the state where the real estate is located



Eliminates the need for probate Is not “Domiciled” anywhere Is not recorded with any agency Is a private document – no public

disclosure of its terms Is quick – assets are transferred

without delay to chosen heirs



Your direct ownership should always be in a Nevada Entity Nevada has the strongest asset protection laws in the

entire country Nevada has no personal or business state income tax Nevada has minimal public disclosure

Direct ownership only in the Nevada entity protects your business because you do not directly own it. If sued, the plaintiff cannot touch the business



The Following slides show some of the structures we form for our clients.



New York Business Sructure

The following slide shows the basic New York Business Structure



Business in Home State

(Single Member

LLC)

Nevada C Corp

Nevada LLC

You or Your Living Trust

100%Member

100%

Member

100%Stock

Manager



Real Estate Structure The followig slide shows a basic real

estate structure.



Nevada C Corporation

Nevada LLC

Single Member

LLC

You / Your Living Trust

Land Trust

Title to Property

Manager

Single Mem

ber

Ownership

Ownership

Beneficial

InterestHolder

Single Member

LLC

Land Trust

Title to PropertyBeneficial

InterestHolder



Medical Profession Structure

The following slide shows a basic medical profession structure in California



Surgical Center LLC

(CA)

Professional S Corp (CA)

Nevada C Corp

Client or Client’s Living Trust

Outsourcing LLC (CA)

Nevada LLC Manager

Managers



Seminar Specials 1. $4,995.00 - Nevada Corporation,

Nevada LLC and Free Living Trust – a savings of $1,000.00

2. $4,995.00 – Nevada Corporation, Nevada LLC and Free New York LLC – a savings of $1,250.00



Seminar Specials 3. $4,995.00 – Nevada Corporation,

Nevada LLC and Free Utah Single Member LLC and Free Land Trust – a savings of $945.00.

4. $975.00 – New York LLC – a savings of $275.00.



4535 W. Sahara Avenue, Suite 200Las Vegas, NV 89102

702-933-4030702-933-4035 (Fax)

cssnevada.com [email protected]

Alan Russell, President

CSS Nevada

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