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David Henderson worked hard at his profession and accumulated the rewards that go with success.
Then a disgruntled client named David as a Defendant in a lawsuit and threatened to “take him for
everything he was worth.” But after David and his attorney had a talk with the plaintiff’s attorney,
the suit was quietly dropped.
The reason? In spite of David's apparent wealth, he does not legally “own” anything that a lawsuit or court
judgment can take. David had the foresight to shelter his assets in judgment-proof entities.
David had the foresight to shelter his assets in judgment-proof international business corporations,
trusts and Nevada limited partnerships.
Contingency-fee cases and run-away jury awards have created a legal onslaught in the justice system. A growing number of aggressive attorneys are now willing to pursue even marginal cases in the pursuit of massive awards.
Adding to this problem, and encouraging these lawsuits, is the fact that the cost of defending against even a frivolous lawsuit often costs a minimum of $100,000 - even before the trial begins! Most defendants find it necessary to surrender and "settle" rather than endure the prolonged emotional pain and financial destruction of a full out battle. These "settlements" are often little more than formalized legal extortion.
Under the U.S. legal system, the deck is stacked in favor of the Plaintiff and against the Defendant. Many lawyers now specialize in contingency fee lawsuits in which they are paid only a percentage of whatever they win for their clients. This encourages the filing of numerous frivolous lawsuits.
Since a new lawsuit is filed every two seconds, the average business owner or professional person stands a chance of being sued numerous times in his or her lifetime. Any lawsuit, no matter how apparently worthless, could result in a ruinous judgment, or at a minimum disastrous legal fees.
Think of this asset protection structure like owning your own private bank...except you like yourself!
You become like the great and powerful oz... you own nothing but control everything. Control assets without revealing your name, social security number, or ownership interest. As the "Banker" you can buy yourself a company car, give yourself a personal loan or perhaps mortgage up your own property to protect your equity. As the "Banker" of your private bank you can wire funds in and out of the country, set up corporations and LLC's owned by your Nevada LLLP (not you) and make investments. But probably the best part is you can give yourself a corporate benefit plan to wipe out taxes and/or pay yourself and your spouse managements wages.
You can open a bank or brokerage account without providing your social security number. Transfer funds, both in and out of the country, without ever revealing your identity and design an estate plan your creditors can't touch. And how you can o offshore to "bulletproof" your cash and learn the secrets for hiding and protecting your assets from lawsuits and seizures!
The following steps provide you with the best asset protection: |
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what If You are faced with a lawsuitDo not be fooled - even if you are innocent, that does not mean the courts are on your side. Jurors often side with the plaintiff who appears to need the funds in question rather than the defendant who they assume has money to spare. Even a judge's own personal feelings or politics can put you in jeopardy. Read the following outrageous quote below: "As long as I am allowed to redistribute wealth from out-of-state companies to injured in-state plaintiffs, I shall - Chief Justice Richard Neely, West Virginia Supreme Court If you ACT NOW it's not too late to shield your assets from plaintiffs and their attorneys. Clients are happy to learn that there is still a lot they can do to protect their assets. |
Other states allow plaintiffs to easily “pierce the corporate veil” and impose corporate liability upon shareholders, directors and officers. Nevada law makes it extremely difficult to “pierce the corporate veil” and it exempts directors and officers from personal responsibility for corporate liabilities except for intentional breaches of duty. Nevada does not require disclosure of corporate shareholders or limited partners. Therefore, one can anonymously maintain control of all assets.
In 1988 Bill Reed, Esq. former collections Attorney was having lunch with a federal judge. He noted to the judge that defendants with the largest assets often proved the hardest to collect from, and even when they lost everything, they frequently kept their cash and their lavish lifestyles. The judge countered Bill’s assessment saying, “Bill, if I can find an asset anywhere in my jurisdiction (the United States), I can seize that asset. Don’t ever forget that!”
An important part of asset protection is privacy!
At Bridgeway Financial Corporation we can provide full privacy for our clients. Nominee officers for your offshore holdings, Management Privacy Trusts and nominee General Partners for your LLLP, nominee bank signers, a Nevada address not your address and Privacy Managers for your LLCs and Trusts. All this being backed up by the best asset protection attorneys and paralegals in the country and a Certified Public Accountant to file any or all tax forms so you can stay totally compliant within the law.
We provide asset protection from lawsuits, wealth preservation, business entity formations, Investment Banking consulting and tax reduction consulting which are all based on sound principles of law, prudent forward planning, and compliance with the Internal Revenue Code. Tax evasion is illegal.
Nevada is the only state that does not share confidential information about its corporations and limited
partnerships with the IRS. In 2001, the IRS formally requested such an exchange program and the Nevada
Governor turned the IRS down flat!
Case Story #5:Protecting a Medical PracticeA successful dentist owned his home, a diversified stock portfolio, his business practice, and an income-producing office building. However, the dentist was concerned about his continued liability exposure in the likely event of a malpractice lawsuit. The doctor and his wife of thirty-five years reside in a 'Community Property' State. One of the worst aspects of community property law is that any creditor of either of the spouses can collect against both the husband and the wife, and against their community property. What was done to protect them? First, the couple entered into a 'division of property assets' agreement. This agreement between the doctor and his wife legally converted their community properties into separately owned properties. It was important that the assets be divided such that a creditor could go after the doctor's assets but have a difficult time going after the wife’s assets in the event either or both are sued. The doctor retained only the assets a creditor would find useless, such as the assets of his medical practice. For further protection, the dentist transferred the apartment building into a Nevada Limited Liability Company (LLC), and the home was transferred to a Principal Residence Trust (PRT), and both were connected to a properly set up Nevada Limited Liability Limited Partnership (LLLP). |
Insurance companies are increasing exclusions and reducing coverage while fees are increasing. Many small businesses and professionals can no longer afford coverage because it has become too expensive!
If you own a business or practice a profession you have a one-in-three chance of being named a defendant in a lawsuit in the next year, and the odds will only grow worse. It is estimated that over 100,000 law school students are currently approaching graduation.
Age, marital status and wealth don't really matter- If you have titled assets and want your loved ones to avoid court interference at your death or incapacity, you need a Living Trust. You should encourage other family members to also create Living Trusts so that you will not have to deal with courts at their incapacities or deaths. A Family Living Trust can be formed in as little as seventy-two hours.
Case Story #6:Protecting Her HomeThe woman was 84, her husband was deceased. She had lived in her home for 30 years, and it was fully paid off. With virtually no savings, she lived off her Social Security checks. While driving to visit her granddaughter, she was involved in an automobile accident and was subsequently sued and held responsible for the accident. The plaintiff and their attorney demanded damages $250,000 in excess of her insurance coverage. It was obvious she could very much be in danger of losing her home - a devastating possibility. However, wisely she had previously transferred the ownership of her home out of her name and into a properly set up Irrevocable Trust. Upon doing an 'asset sweep' search, the plaintiff’s attorney suddenly ceased their efforts to pursue this client in excess of her insurance coverage. Typically, a plaintiff and their attorney will often settle the case in order to obtain the insurance monies rather than go through a prolonged trial that may take months or perhaps years to settle and achieve nothing. It is important to note that you do not need to be rich to engage in asset protection planning. All assets are worth protecting. Whether you own a home with equity of $75,000 to $1,000,000 (or more) the need to protect your assets is the same. A simple settlement leading any plaintiff to your insurance company relieves you of the costs and stress of dealing with a tragic situation. |
Learn how to control your assets without owning them and how to make your property invisible to Asset Searches. Discover how to use business entities with limited liability and charging order protection to deter frivolous lawsuits and encourage early settlement of serious claims within your insurance policy limits.
That is the ultimate goal of real asset protection.
Avoid probate court by using Management Privacy TrustsTM (“MPTs”) and a Nevada Limited Liability Limited Partnership (LLLP) to pass your family business and real estate interests to your heirs as successor beneficiaries. Management Privacy Trusts can also be used to prevent your Family Limited Liability Limited Partnership from being used by your creditors to discover your most valuable assets. In addition, your Family Living Trust completes your planning and is the capstone for all your personal needs.
A Family Living Trust is a legal document drafted in conjunction with a Pour Over Will, a Living Will, Letter of Wishes, Durable Power of Attorney and Non-Contestability. Together they will enable you to avoid probate and allow you, not the courts, to control your assets while you are living. If you become disabled or incapacitated, the Trust will appoint the person you have named to act as your guardian using the durable power of attorney you have authorized.
Without an asset preservation plan, most of your estate could go to lawyers or the government, not your heirs. Due to the tragic events of September 11, increased scrutiny has been placed on offshore banking institutions and offshore trust jurisdictions that many Americans previously used to protect their assets. However, a Wealth Protection Trust TM ("WPT") provides asset protection and financial privacy without having to leave the country.
These trusts can hold a variety of assets for the beneficiaries in a safe manner and work best with other legal entities. The trustee can hold, administer,manage, and distribute the trust's assets to its beneficiaries without interference by the settler’s subsequent business or legal activities. Claims and legal actions against the settler do not impact the trust or its beneficiaries as long as no fraudulent conveyance is involved in its formation and the client acts while there are no legal storms brewing on the horizon.
A WPT is a “Grantor Trust” that permits you and any other parties you choose to be its beneficiaries. As an irrevocable trust whose assets cannot be demanded by a beneficiary, attached or garnished by a beneficiary’s creditors, this powerful tool can provide protection from creditors while still allowing the “founder” benefits and control of the LLLP assets. WPTs are appropriate for a wide range of people such as professionals, officers, directors, fiduciaries, real estate owners with exposure to legal liability, and business owners.
Only in Nevada does the law provide one major advantage that is so preferable that it is difficult to justify establishing Wealth Protection TrustsTM in any other state. This advantage lies in a shorter time period under Nevada law between the date an asset is transferred and the date the asset is protected from the creditors of the founder.
Nevada Dynasty Trust and Legacy Planning
Enormous estate tax savings are offered with this “generation skipping transfer trust”. Creating a dynasty trust can save up to 80% percent of your estate tax and can last up to 365 years.
As of October 1, 2005, if you set up a multiple generation dynasty trust in the State of Nevada using a Nevada Trust Company Nevada law says that your trust can last as long as 365 years. A dynasty trust can distribute income and principal exactly the way you would have wanted and can allow you to pass your estate to a dozen generations or more.
The Dynasty Trust is drafted on the founder's dreams and hopes for the future of the loved ones who are the beneficiaries. It helps to reduce or eliminate the loss of accumulated wealth due to estate taxes, lawsuits or divorce.
Provisional incentives may be included for your children, grandchildren and their descendants to seek education, be healthy and productive members of society and who contribute to the betterment of their local community, church and the world around them. Financial incentives (bonus payments) may be inserted into the trust for obtaining higher education, cultural contributions, job creation by being an entrepreneur or volunteering in the church or community, achievement in the arts or sciences, military or public service, etc. The Multiple Generation Dynasty Trust benefits the founder’s children, grandchildren and their descendants or if one has no children, then perhaps nephews and nieces and their descendants and works in conjunction with specific funding strategies to become a self-renewing source of family wealth. Your personal legacy should be based in part on the wealth you accumulate and grounded on your 'Core Values' which reflects what you stand for and believe in.
For maximum creditor and divorce protection an independent trustee should be used to make distributions and other sensitive decisions. The primary beneficiary may be given the power to remove and replace trustees with or without cause.
If drafted correctly, assets are protected from estate taxes and from the beneficiary's creditors, including divorcing spouses. This co-trusteeship, although slightly more complex than having just one trustee, provides the ultimate combination of control, estate tax savings and creditor protection.
Nevada has become one of the most favorable jurisdictions in the country in which to create a dynasty trust. Nevada residents, as well as non-residents, can protect assets from estate taxes, creditors and divorcing spouses for up to 365 years, and in combination with no state income tax, this makes Nevada an ideal asset protection jurisdiction.
Probate is the automatic legal process whereby a Court Judge administers your will, according to the law, and adjudicates the interests of your heirs and other parties who may have claims against your estate. By law, it is necessary to "probate your estate", whether or not you have a valid will. Any party may challenge the probate in court and if the claim is rejected, the claimant may file a lawsuit to prove the claim.
Once the Court gets involved it stays involved. The Court Judge, not your family, controls how your assets are to be used. Probate is expensive and publicly embarrassing for your family. Probate can last over a year before all the property is distributed, and incur substantial court and attorney costs for your family.
Property held in a Living Trust avoids probate. Your personal representative provides documentation to the court, and your estate is prevented from ever entering probate. One of the many ways to avoid probate is to execute a Living Trust.
As creator of a trust, you transfer ownership of your real property from yourself to a trust- which you control and can revise at any time. Upon death, the persons you named as beneficiaries in the trust acquire full ownership of the property of the trust. A Living Trust helps your estate avoid estate tax. And unlike probate (which is a fully public process), a Living Trust shields your private affairs and that of your heirs from public scrutiny.
A family living trust is a necessary component in family and estate planning
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Lawyers for plaintiffs will only initiate litigation when they believe it will pay off, not against judgment-proof defendants. The first step in becoming judgment-proof is to get your assets out of your personal ownership. One of the best ways to do this is to transfer your money, investments, vehicles, real property, and other assets into an offshore corporation.The best way of getting a plaintiff’s lawyers to accept a token settlement is to convince the lawyers that your assets are truly beyond their reach.
By forming an Offshore International Business Company (IBC) you create a legal entity to hold assets, do business, and shelter the identities of the beneficial owners. No investigative agencies, trial lawyers, ex-spouses, ex-business partners, creditors, or anyone
else attempting to locate your wealth will be able to find your sheltered accounts and assets. This makes you a very poor prospect for a lawsuit.
Case Story #7:Case of the A&W RestaurantA mother and son team owned a small-town A&W Restaurant and a small shopping complex employing approximately 30 full and part-time employees. One of the restaurant's junior-managers unexpectedly sexually harassed two female employees and was subsequently fired. However, the fired junior manager soon returned by filing a wrongful dismissal lawsuit and claiming no such abuse took place The two female employees, in turn, also engaged attorneys and sued the owners of the A&W for $3 million and $4 million dollars respectively, claiming sexual discrimination, emotional distress, physical harm, and alleging a "pervasive" atmosphere of sexual harassment that led to on-site sexual incidents. The owners now faced multiple lawsuits and felt sure that any decisions would rule in favor of at least one employee. Their greatest fear was a class-action lawsuit plaintiffs' attorneys were surely considering. Thankfully, these owners had already established their asset protection. The shopping mall was previously placed into an LLC with multiple partner-owners to create charging order protection. The restaurant was previously placed into a Nevada Corporation. Under new Nevada State laws all stock in the corporation is also protected by charging order protections (available only to Nevada Corporations and not to the corporations of any other state.) Finally, there were no other significant assets in the Nevada corporation. At a meeting with the plaintiffs' attorneys, the owners pointed out there was no "pot of gold at the end of the litigation rainbow". The clients had thought and planned ahead, and the plaintiffs' attorneys could not assert any fraudulent transfer. The plaintiffs' attorneys did not want to go through a protracted and expensive litigation challenging asset transfers. All suits were dropped and the owners cleared of any wrong-doing. The fired junior-manager subsequently served a 20-month prison sentence on sexual misconduct charges relating to the incidents. |
Even if the judgment of a U.S. court should target your International Business Corporation (IBC), the foreign courts of the British Virgin Islands or Cayman Islands do not recognize U.S. court judgments.
This ability to protect your assets is the reason many doctors, business professionals, and owners of small businesses have discovered IBCs as an effective way to protect assets.
The main reason for setting up an IBC – International Business Company is to create an offshore haven to move liquid assets quickly out of the United States. It is a known fact that judges, IRS and government agencies have frozen cash accounts in a move to cripple their opponent…that’s you. As part of “bullet proof” asset protection one should create a reserve account which we recommend in the Cayman Islands with at least a minimum balance of funds. If a client needs to move liquid assets quickly in light of pending litigation they can do so from their LLLP or LLC safely thereby avoiding the “fraudulent transfer rule” and avoiding any chance that a Judge can freeze all your cash assets.
Further, we recommend you “test drive” your offshore account. You will find that the brokers are friendly, speak English and understand asset protection…that’s part of their business. You will be amazed how easy it is to move money in and out of the U.S. and we can take care of any tax filings if you earn income offshore. Air travel is quick, hotels are great and restaurants are enjoyable as you go out and visit your money or you may never go…the choice is yours.
Once a lawsuit has been filed, the law will not allow you to move your assets. You must act ahead of time to protect what you own before it comes under attack.
Protect Your Assets Now Before A Lawsuit Happens
An asset is not vulnerable if it is not held in your name. A Nevada LLC is the best place to secure investments because it provides privacy, limited liability and charging order protection. Nevertheless, Nevada corporate assets can be compromised during post-judgment discovery and the federal courts have supremacy over all state courts. Therefore, the best way to protect an asset is to transfer it out of your name and move it offshore outside the jurisdiction of the United States Courts. Once you develop financial problems, it will be too late because any property transferred will be set aside as a fraudulent transfer due to the timing of the transfer. If you delay and a plaintiff prevails, you could lose everything!
The words “Financial Crisis” are heard all too often in today’s world. We are bombarded by reports of corrupt executives, downgraded earnings reports and lost nest eggs. We all know people, good people, who have lost jobs, pensions and livelihoods due to the chaotic economic situation in this country today. It is definitely a dangerous and complicated landscape for all of us to live in, care for our families and plan for our futures. Once a lawsuit has been filed, the law will not allow you to move your assets. You must act ahead of time to protect what you own before it becomes under attack. Ask yourself...What is peace of mind really worth to you because without Asset Protection you could suddenly lose everything you've worked for!
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Asset Protection from Lawsuits, Wealth Preservation, Debt Elimination, Business Entity Formation, Investment Banking Consulting, Tax Reduction Consulting are based on sound principles of law, prudent forward planning, and compliance with the Internal Revenue Code. Tax evasion is illegal. Per IRS Circular 230, nothing herein may be used by any taxpayer to avoid penalties under the Internal Revenue Code for noncompliance or to support the promotion of any particular federal tax transaction. Taxpayers should confer with a Certified Public Accountant as to federal tax matters and timely file any applicable IRS forms or tax returns.
DISCLAIMER: All information contained in this website is for education purposes only. Bridgeway Financial Corporation™, and its agents and affiliates, cannot and will not render any legal, investment, financial or tax advice of any kind, unless said agent or affiliate is duly licensed by the applicable state and/or federal authority to give said advice.