Reducing liability asset protection
This presentation is the property of its rightful owner.
Sponsored Links
1 / 12

Reducing Liability & Asset Protection PowerPoint PPT Presentation


  • 75 Views
  • Uploaded on
  • Presentation posted in: General

Reducing Liability & Asset Protection . RICK ZAPATA - CEPM REGIONAL EXTENSION AGENT Alabama Cooperative Extension. Setting Up Business Structure. Sole proprietor : single owner of business, files income on schedule C or Schedule F (Totally Liable) Pass Through Entities

Download Presentation

Reducing Liability & Asset Protection

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Reducing liability asset protection

Reducing Liability & Asset Protection

RICK ZAPATA - CEPM

REGIONAL EXTENSION AGENT

Alabama Cooperative Extension


Setting up business structure

Setting Up Business Structure

Sole proprietor : single owner of business, files income on schedule C or Schedule F (Totally Liable)

Pass Through Entities

Partnership: more than one owner, generally files on form 1065. General, Limited, Limited Liability

Limited Liability Company: treated as prt, corp business privilege tax return required

Corporation: Sub Ch. S (<100 share holders) or full “C”, requires 1120 return


Scales of justice tilted

Scales of Justice - Tilted ?????


Who gets sued

Who Gets Sued

Generally people who do not follow best business practices often will be sued

The farm business (by name)

The owner of the business (Public Record)

The employee of the business

If a corporation or LLC or Partnership, the officers or partners will be named in the legal action

Anyone they think who has $$$$“deep pockets” (shot gun approach)


Litigation

Litigation

Someone gets MAD !!!!

“Mad” hires an Attorney (% fee/contingency)

Served with Complaint

You hire an Attorney (Paid by the Hour)

Deposition

(Discovery= Who did what, Who owns what)

Court (Judge or Jury Trial)

Verdict for or Against

Against = Judgment


Judgment granted

Judgment Granted

Plaintiff petitions court to reduce Judgment to Lien

Lien sent to County Sherriff to collect (bank accounts, person property, business property, real property, cash or liquid assets

Judgment good for 20 years in Alabama and plaintiff can collect balance owed plus 12% interest per year (compounded yearly)


How they and their attorney win

How They and Their Attorney Win

They must persuade the Judge or the Jury that you are liable for the loss. They must receive a favorable verdict.

There must be something for them to get. There must be assets that can be attached (Lien).

They can GET only what is TITLED in your name or in the businesses’ name


Litigation1

Litigation

Someone gets MAD !!!!

“Mad” hires an Attorney (% fee/contingency)

Served with Complaint

You hire an Attorney (Paid by the Hour)

Deposition

(Discovery= Who did what, Who owns what)

Court (Judge or Jury Trial)

Verdict for or Against

Against = Judgment


Insurance friend or foe

Insurance: Friend or Foe

A Liability Insurance policy has a section of exclusions where they do not have to pay

I call them the “OUTS”

The insurance company will send their attorney to the discovery meeting and they will try to establish: Fraud or Misrepresentation or any other outs

The attorney will then petition the court to exclude them from any liability


Asset protection trusts

Asset Protection : Trusts

  • Definition: Is a legal entity that a person creates. Usually drawn by an attorney.

    • Trusts hold “TITLE” to real and personal property that is transferred to trust

    • The trust provides financial benefits for people or organizations named in the trust

    • The manager of the trust is called the trustee

    • The persons or organization receiving benefits from the trust are called beneficiaries

    • Trusts protect assets from Judgment/lien creditors and Divorce Actions


Loss prevention tips

Loss Prevention Tips

Trusts can protect Business and Personal assets

Have nothing in the name of the owner

Do not put spouse’s name on the business

Do not “mix” business and personal assets

Keep bank accounts separate

Rent business assets from separate party

Leverage all assets when possible


Need for professional advice

Need for Professional Advice

  • The information in this presentation and accompanying material is provided for educational purposes only. It is not a substitute for competent financial or legal advice. You are encouraged to seek professional financial and or legal advice. This information is provided to help you better communicate with your professional advisors in analyzing your specific situation.


  • Login