Proposed IRS Regulations Will Affect Asset Protection Planning With Family Limited Partnership

Jon Alper Limited Partnerships and LLC

The IRS has issued regulations concerning the estate planning benefits of family partnership. These regulations can affect asset protection planning because they reduce the effectiveness of estate planning rationale for transfers of non-exempt assets in to family partnerships. The IRS proposed regulations were discussed in an article in the Wall Street Journal. Limited partnerships can be used for asset protection …

Are There Benefits From Forming LLC in Delaware?

Jon Alper Limited Partnerships and LLC

Some of my clients ask me whether there is an advantage to create an LLC Delaware. There may be benefits to a Delaware LLC, but the advantages are largely misunderstood. Delaware law specifically protects single member LLCs from collection remedies other than charging liens. Many people think that if they form a single member LLC in Delaware their interest would …

How To Find That Second Member For Florida Multi-Member LLC

Jon Alper Limited Partnerships and LLC

At least two members in a Florida LLC are required to limit creditor collection to a charging lien. Many clients who already have a single member LLC that they set up for their own business or investment have difficulty adding another member. For example, they may be unmarried or if married, may not want their spouse involved.

Multi-Member Ownership of Florida Accounting Business

Jon Alper Limited Partnerships and LLC

An accountant was starting a new tax practice in Florida. I suggested he form a professional LLC to be owned by the accountant and at least one other person.. The accountant stated that he did not think anyone other than a licensed accountant could own any part of his business. I suggested he confirm his assumption with the agency that …

Court Denies Garnishment of Member’s LLC Distributions

Jon Alper Limited Partnerships and LLC

A writ of garnishment is a collection tool that gives the judgment creditor the right to collect a debt owed to the debtor. In a Florida appellate case decided earlier this year a judgment creditor convinced a trial court to issue a writ of garnishment against a limited liability company to garnish distributions that the LLC owed to the judgment …

An Advantage of Issuing LLC Ownership Certificates

Jon Alper Limited Partnerships and LLC

Florida law does not require a limited liability company to issue physical ownership certificates to its members. Ownership of a Florida LLC may be established, and usually is stated, exclusively in the appropriate section of the LLC’s operating agreement. LLCs differ in this respect from corporations because corporation ownership is established by issuance of stock certificates rather than a shareholder …

Should Your LLC Issue Written Certificates of Membership Interests?

Jon Alper Limited Partnerships and LLC

Ownership of a corporation is evidenced by a stock certificate. Ownership of an LLC is evidenced by the LLC’s operating agreement , and in most cases, confirmed by LLC income tax returns. LLCs do not typically issue “shares” or other written certificates of ownership. But, an LLC may elect to issues written shares, and in some cases, establishing member ownership …

Court Issues Charging Lien Against Interest in Foreign State LLC

Jon Alper Limited Partnerships and LLC

Often, clients ask me whether there is an advantage to their forming an LLC or limited partnership in a state other than Florida, commonly, Nevada, Wyoming or Delaware. The clients have heard from friends, attorneys, or internet research that states other than Florida (“foreign states”) have more protective LLC laws. I have almost always advised my clients that there is …

Attorney Reports Charging Lien Assigns Tax Liability to Creditor

Jon Alper Limited Partnerships and LLC

Many people believe that one of the principal benefits of LLCs or partnerships is that a creditor’s charging lien makes the creditor liable for the debtor’s share of income tax associated with his LLC or partnership interest pursuant to Rev. Rul 77-137. I have never encountered a situation where a creditor holding a charging lien was responsible for the debtor’s …