Single Owner and LLC .. worth it?

[bradg33]

Yes. Listen to your attorney. Not a bunch of pilots.

For me there is no other way. My properry is all owned under Florida Land Trust with out of state LLC as trustee

Everything else i have has at least two layers. My personal bank account has maybe 200 bucks. Its my early-warning system. Thats what the lawyer calls it. Everything else is in multi-member llcs and trusts.

Yes i pay about 1000 per year in fees but i am as close to bulletproof as one can get. Nothing is perfect though and you need a lawyer that specializes in this sort of thing.

Well worth it. You only need to lose everything once to learn to protect it from the onset. Good luck!!

Depending on the circumstances, you may not be as bulletproof as you think. Did your attorney explain fraudulent transfers to you?

 

[EminiTrader]

Depending on the circumstances, you may not be as bulletproof as you think. Did your attorney explain fraudulent transfers to you?

Yes. I know all about fraudulent conveyance. I am not under any legal or civil matter or know of anything pending. Therefore we did/do this 100 percent legal. As long as it is set up properly at the correct time its all good.

The problems come when people try to do this after the fact. At that point you are screwed. Hence the comment: do this when the financial waters are calm.

I've been protected like this for over 15 years. Nothing is 100 percent but I sleep well at night knowing my families assets are very secure.

 

[PPC1052]

The LLC becomes the registered owner of the aircraft. In other words, if you live in California and you setup an LLC in Nevada for the plane the FAA will frown if you give a bogus address (like a PO Box) for the LLC.

Nothing wrong with incorporating in one state, and having a principal place of business in another. Happens all the time. Of course, if you do so, now the LLC can be sued in either state.

 

[PPC1052]

See it like this. Your LLC owns the plane. You are in your car and you kill someone. They sue. They win. If properly structured they cant take the plane as its not owned by you.

But if you own the LLC, they can take the LLC.

 

[PPC1052]

Yes. Listen to your attorney. Not a bunch of pilots.

For me there is no other way. My properry is all owned under Florida Land Trust with out of state LLC as trustee

Everything else i have has at least two layers. My personal bank account has maybe 200 bucks. Its my early-warning system. Thats what the lawyer calls it. Everything else is in multi-member llcs and trusts.

Yes i pay about 1000 per year in fees but i am as close to bulletproof as one can get. Nothing is perfect though and you need a lawyer that specializes in this sort of thing.

Well worth it. You only need to lose everything once to learn to protect it from the onset. Good luck!!

Yeah, this helps. You can benefit if you structure it properly, and a good attorney that knows this can help.

 

[midlifeflyer]

is it worth it to set up a LLC when i am a single owner of the aircraft? what kind of hoops do i have to jump through?

To summarize this thread, it depends.

• What are you trying to accomplish? That means both for both liability and non liability.
• What kind of protections does your state's laws provide?
• If it's important, see a professional, not SGOTI.

 

[bradg33]

Yes. I know all about fraudulent conveyance. I am not under any legal or civil matter or know of anything pending. Therefore we did/do this 100 percent legal. As long as it is set up properly at the correct time its all good.

The problems come when people try to do this after the fact. At that point you are screwed. Hence the comment: do this when the financial waters are calm.

I've been protected like this for over 15 years. Nothing is 100 percent but I sleep well at night knowing my families assets are very secure.

FWIW, the fraudulent transfer laws in most states apply to future creditors as well. "Asset protection" lawyers tend to ignore that part of the UFTA. That said, if you did all of your planning and transferring long ago, the statute of limitations is probably a solid defense, though.

 

[bradg33]

But if you own the LLC, they can take the LLC.

Depends on the state. Not all states allow you to creditors to take the LLC interest itself. Creditors can get what's called a charging order on the distributions from the LLC (basically a garnishment), but not the actual LLC membership interest. There's some variance when it's a single-member LLC, though.

 

[EminiTrader]

Yes my assets were transferred well over a decade ago. My main source of income is trading (stocks, options, and futures) that is all LLC owned. LLC's are then owned by other entities and trusts - all 100 percent legal. Like I said - there is NOTHING guaranteed in the asset protection world, I get it. However, I am in about the best spot that I can be in. Doesn't mean that what works for me would work for you. Everyone has different circumstances.

But hypothetical example - and this is just off the cuff and not exactly sure if this is how it would be handled as I can't speak for my attorney.

Say I am sued. I lose. I have to go inside a debtors exam. I will have to divulge honestly any LLC that I am associated with. I tell them I have association with ABC LLC out of Florida. I leave court. My lawyer opens up new LLC's AFTER THE FACT so I am not lying (the exam is now over). Money is moved. BUT NOT TO ME - so no fraudulent conveyance.

Now ABC LLC - get's a charging order against it from the original creditor that states any distributions made to (ME) are to go to us. LLC writes back and says "yes we will comply 100 percent with the court order". Now the LLC simply wont make any distributions, payments to me EVER again. The order stands and money is now somewhere else.

Can I go back in court? YUP - I can. A very aggressive attorney may take another stab. I walk in - I did not lie - remember we created a NEW llc after the fact and the NEW LLC received a capital infusion- but no money was given to me. And the whole process goes around and around till they give up.

Go against the US Government and they will NEVER give up. Go against state farm insurance and after the 2nd round, they WILL give up. Ask me how I know.. My attorney does this stuff all day long.

I am no expert- I've just learned bits and pieces over the years. We meet once every 6 months to go over it all. Again, it's not 100 percent (nothing is) but I'm in pretty good shape

 

[EminiTrader]

Depends on the state. Not all states allow you to creditors to take the LLC interest itself. Creditors can get what's called a charging order on the distributions from the LLC (basically a garnishment), but not the actual LLC membership interest. There's some variance when it's a single-member LLC, though.

Yes, true. But never use a single member LLC. No reason for it. Structure it with different LLC's, trusts, etc.

 

[EminiTrader]

But if you own the LLC, they can take the LLC.

Correct. That's why I don't own the LLC

I get sued - the LLC is owned by a trust or another LLC. Yes people can dig through the layers but we add new layers before the old ones are subpoenaed.

 

[deonb]

But if you own the LLC, they can take the LLC.

Not if the LLC is owned by a trust of which he is a trustee but not a named beneficiery.

In that case it takes a vote from all trustees to designate a new beneficiery - which they wont do during a lawsuit, and cant be legally compelled to do.

 

[paflyer]

Depends, worth it for me, I use the plane for some business so I depreciate it that way, I also have registered some vehicles under it.

No atty needed, just used a online service, not that big of a deal.

Yep, LegalZoom. Did it for a few hundred bucks, plus I have a registered agent to make it harder to determine ownership and my travels (for the nosy observer). Yes, I am paranoid.

 

[paflyer]

Im aware of how an LLC works. It's not as simple as just slapping down 125$. A significant amount of legal documentation is required for the issuance as well as the ongoing complicance to keep it active. I don't want any wandering minds assuming the process is quick and easy.

Nonsense, you can do the app on LegalZoom online, no dox needed (maybe dependent on stater of incorporation), compliance a snap in PA at least . Some other states want a little more ongoing, but it's generally trivial. Watch out that some states will automatically assess business asset taxes.

 

[paflyer]

The article has general applicablity for LLC and aircraft owner(s). Sole owners have no reason to have one. Partnerships not generating income have no reason for one either.
The FAA and IRS do not want to see anyone setting up arms length entites where the principals are nowhere near where the entity exists. The same applies to paying property taxes on the plane. If you pretend to hangar the plane in one state/county to get lower taxes but live in another you will run into a wall eventually.

Are you a CPA or IRS agent?

 

[EminiTrader]

I probably should not share this on a public forum but I honestly could care less as nobody is after me

We use an "early warning system". I own a very small, cheap condo - this condo is my "home" all my mail, drivers license, FAA stuff all goes here. I have it mortgaged. I have a bank account with a couple hundred cash. If anyone comes after me they will do a search of my name and find the bank and house. Now once they ping that - we KNOW they are after us. (who is they? No idea, it's hypothetical)

My house in which I reside is owned free and clear. It's under Florida Land Trust and my name is not on ANYTHING. NO bills, no mortgages, no NOTHING. the only way you know I live here is if you come visit or see me here. I worked really hard to pay off my property and I protect it. And even if you proved I lived here you could NEVER prove I owned it. Just read up on Florida Land Trusts.

See this is where friends and family say "oh your paranoid" or "if you do nothing wrong you don't have to worry about it". All good points. But I was wrongfully sued back in 2001. I lost. I lost a TON of money in legal fees (over 30K). I ended up settling to make it go away as it was the cheapest way to go. At the end of the day I was out about 80 grand. To some of you guys that may be a drop in the bucket. To me I was hurting!!

Was I paranoid? NOPE. DId I do something wrong? NOPE. But somebody THOUGHT I did and they sued. So if your attitude is that of "you dont do anything wrong, blah blah". That's fine thats your choice. But god forbid you get yourself in a jam or someone accuses you of something, you risk losing the assets you worked for.

I am shaking just talking about this because it conjures up so much anger and hatred. I guess I'm still not over it. But I promise it will never happen again.

 

[EminiTrader]

[QUOTE="The article has general applicablity for LLC and aircraft owner(s). Sole owners have no reason to have one. Partnerships not generating income have no reason for one either.
The FAA and IRS do not want to see anyone setting up arms length entites where the principals are nowhere near where the entity exists. The same applies to paying property taxes on the plane. If you pretend to hangar the plane in one state/county to get lower taxes but live in another you will run into a wall eventually.[/QUOTE]


For the record I pay may taxes on planes I buy. I dont care what the FAA or IRS wants me to do. I use the laws how they are written to protect ME - not the FAA or IRS.

 

[paflyer]

For the record I pay may taxes on planes I buy. I dont care what the FAA or IRS wants me to do. I use the laws how they are written to protect ME - not the FAA or IRS.

That wasn't aimed at you.

 

[paflyer]

I probably should not share this on a public forum but I honestly could care less as nobody is after me

We use an "early warning system". I own a very small, cheap condo - this condo is my "home" all my mail, drivers license, FAA stuff all goes here. I have it mortgaged. I have a bank account with a couple hundred cash. If anyone comes after me they will do a search of my name and find the bank and house. Now once they ping that - we KNOW they are after us. (who is they? No idea, it's hypothetical)

My house in which I reside is owned free and clear. It's under Florida Land Trust and my name is not on ANYTHING. NO bills, no mortgages, no NOTHING. the only way you know I live here is if you come visit or see me here. I worked really hard to pay off my property and I protect it. And even if you proved I lived here you could NEVER prove I owned it. Just read up on Florida Land Trusts.

See this is where friends and family say "oh your paranoid" or "if you do nothing wrong you don't have to worry about it". All good points. But I was wrongfully sued back in 2001. I lost. I lost a TON of money in legal fees (over 30K). I ended up settling to make it go away as it was the cheapest way to go. At the end of the day I was out about 80 grand. To some of you guys that may be a drop in the bucket. To me I was hurting!!

Was I paranoid? NOPE. DId I do something wrong? NOPE. But somebody THOUGHT I did and they sued. So if your attitude is that of "you dont do anything wrong, blah blah". That's fine thats your choice. But god forbid you get yourself in a jam or someone accuses you of something, you risk losing the assets you worked for.

I am shaking just talking about this because it conjures up so much anger and hatred. I guess I'm still not over it. But I promise it will never happen again.

Hey, just because you're paranoid doesn't mean that no one is out to get you.

You have a nice umbrella?

 

[EminiTrader]

Hey, just because you're paranoid doesn't mean that no one is out to get you.

You have a nice umbrella?

I have a parachute with a little red handle on it And yes I know your response was not aimed at me. I meant to to quote Citizen500

 

[PPC1052]

Not if the LLC is owned by a trust of which he is a trustee but not a named beneficiery.

Sure, completely change the fact pattern and the results are different.

 

[PPC1052]

I probably should not share this on a public forum but I honestly could care less as nobody is after me

We use an "early warning system". I own a very small, cheap condo - this condo is my "home" all my mail, drivers license, FAA stuff all goes here. I have it mortgaged. I have a bank account with a couple hundred cash. If anyone comes after me they will do a search of my name and find the bank and house. Now once they ping that - we KNOW they are after us. (who is they? No idea, it's hypothetical)

My house in which I reside is owned free and clear. It's under Florida Land Trust and my name is not on ANYTHING. NO bills, no mortgages, no NOTHING. the only way you know I live here is if you come visit or see me here. I worked really hard to pay off my property and I protect it. And even if you proved I lived here you could NEVER prove I owned it. Just read up on Florida Land Trusts.

See this is where friends and family say "oh your paranoid" or "if you do nothing wrong you don't have to worry about it". All good points. But I was wrongfully sued back in 2001. I lost. I lost a TON of money in legal fees (over 30K). I ended up settling to make it go away as it was the cheapest way to go. At the end of the day I was out about 80 grand. To some of you guys that may be a drop in the bucket. To me I was hurting!!

Was I paranoid? NOPE. DId I do something wrong? NOPE. But somebody THOUGHT I did and they sued. So if your attitude is that of "you dont do anything wrong, blah blah". That's fine thats your choice. But god forbid you get yourself in a jam or someone accuses you of something, you risk losing the assets you worked for.

I am shaking just talking about this because it conjures up so much anger and hatred. I guess I'm still not over it. But I promise it will never happen again.

As Mark Steyn says, "the process is the punishment."

 

[citizen5000]

Repeat: An LLC does NOT protect you from negligence, debt collection or a crime. If you put all your assets into an LLC expecting to escape a collection for debt or a lawsuit you are mistaken.

 

[paflyer]

Repeat: An LLC does NOT protect you from negligence, debt collection or a crime. If you put all your assets into an LLC expecting to escape a collection for debt or a lawsuit you are mistaken.

Are you an attorney?

 

[EminiTrader]

Repeat: An LLC does NOT protect you from negligence, debt collection or a crime. If you put all your assets into an LLC expecting to escape a collection for debt or a lawsuit you are mistaken.

Citizen. . Very true. I am talking about structuring (properly and legally) a way to protect your assets. Does the way my lawyer did it work? YUP - his clients have been sued countless times yet his clients seem to keep their assests.

Think about it like this: If a Family Trust owns an LLC that owns an LLC that owns another LLC that owns a plane - guess what - I do NOT own it. A family trust does. Period. So if I get sued and lose they can try to come after the airplane (or other assets) but if they are owned by an LLC - sorry.

It's like you get in a wreck so you sue McDonalds across the street. It makes no sense.

 

[EminiTrader]

In any event - to the OP: As I said - don't listen to a bunch of pilots. You heard every opinion in the book. What works for me - works for me. I paid a lot of money for the protection I have. Some say it wont work - again, another opinion. Do what I DO - LISTEN TO YOUR LAWYER - nobody else.

Gotta roll guys. Have a great weekend. Fun discussion.

 

[coloradobluesky]

They couldn't get OJ's IRA...

 

[deonb]

Sure, completely change the fact pattern and the results are different.

What'd I do?

EminiTrader mentioned from the beginning that he uses a multi-tier ownership structure, and mentioned multiple times that it involves trusts.

Of course I can't be sure if his structure is exactly what I described, but it seems the obvious way to set this up.

 

[PPC1052]

What'd I do?

I said that if you own the LLC, then they can take the LLC.

You changed that fact in your response to the LLC being held in trust. Big difference in outcome.

 

[PPC1052]

EminiTrader mentioned from the beginning that he uses a multi-tier ownership structure, and mentioned multiple times that it involves trusts.

Actually, no. What he first said was:

Your LLC owns the plane.

That was what I first responded to. By saying "your llc," he was implying he owned the LLC. He only clarified that the LLC was actually not his, but belonged to a trust.

Overall, not a big deal. But my point is once you change the fact pattern from what I responded to, of course the ultimate answer changes.

 

[deonb]

Actually, no. What he first said was:

"Your LLC owns the plane."

That full post in context:

See it like this. Your LLC owns the plane. You are in your car and you kill someone. They sue. They win. If properly structured they cant take the plane as its not owned by you.

We use several layers of LLC and trusts to protect my family's assets.

Take care of this when the financial waters are calm.

It must be done correctly or yes it can be pierced.

You responded originally to part of his post out of context, hence the runaround .

Either way. Coolness - we both know what he means.

 

[denverpilot]

Im aware of how an LLC works. It's not as simple as just slapping down 125$. A significant amount of legal documentation is required for the issuance as well as the ongoing complicance to keep it active. I don't want any wandering minds assuming the process is quick and easy.

Not in all States. In fact LLCs are far simpler to maintain than S or C Corporations overall. No requirement for annual meetings, minutes, by-laws, any of that. You can use them if course, if you like. You can even require Robert's Rules of Order at meetings if you so desire and sign documents agreeing to it and you're into masochism. But no requirement to do so.

And you're wrong about Colorado LLCs for sure.

They're cheap here compared to almost anywhere else. About $35 and write a couple of documents between the principals and sign them, if you want to be all dotted I's and crossed T's get it notarized. Not required but smart.

And an annual "report" to the State to prove the LLC still exists each year when you pay the annual fee online that literally consists of clicking a checkbox and hitting submit.

If you need confirmation the business exists from the State, you log into the website and print the certificate.

The last one I set up here cost the annual fee and took five minutes. I forgot to get it an EIN so I did that from my iPhone sitting at the bank counter setting up its bank account.

(Turns out it didn't need an EIN but the bank computer didn't understand that, so it has one. If IRS complains, I'll tell them to talk to the bank Who are apparently, idiots... their computer system refuses to open all business accounts without an EIN.)

I was fairly impressed the IRS site works on a mobile browser.

Brain dead easy here. Condolences if your State makes them unnecessarily complex.

Tax-wise there's multiple possibilities depending on how the LLC wishes to be categorized, sole proprietorship, partnership, S Corp, or Corp. That's a different story.

But creation of the LLC is brain dead simple.

 

[weilke]

Im aware of how an LLC works. It's not as simple as just slapping down 125$.

In some states it IS that simple.

A significant amount of legal documentation is required for the issuance

A 1 page registration form.

as well as the ongoing complicance to keep it active.

A a credit card and filling out a 1 page web form once a year.

I don't want any wandering minds assuming the process is quick and easy.

In many states, the process to register and maintain a LLC is quick and easy. No magic dust or legal degree required.

If your LLC wants to borrow money or open a bank account, there are some additional things required.

 

[weilke]

Repeat: An LLC does NOT protect you from negligence, debt collection or a crime. If you put all your assets into an LLC expecting to escape a collection for debt or a lawsuit you are mistaken.

The landlord for one of my businesses is the local ambulance chaser. He owns every office condo in the building through a separate LLC and every LLC through different trusts. He must be stupid.

 

[midlifeflyer]

The landlord for one of my businesses is the local ambulance chaser. He owns every office condo in the building through a separate LLC and every LLC through different trusts. He must be stupid.

Apples and oranges. @citizen5000 is probably talking about personal negligence, if your ambulance chasing landlord does some repairs himself and the roof caves in, the LLC does not protect him personally. But the company that owns the building is hiring others and, in most cases that protects him personally. And the separation of each building in its own company generally protects the companies from another company's and the lawyers personal mistakes in other areas.

 

[midlifeflyer]

On how simple it is. Yes, in most states, creating an LLC is really easy. As is maintaining its existence and good standing. But there is a bit more to maintaining its protections.

 

[weilke]

Apples and oranges. @citizen5000 is probably talking about personal negligence, if your ambulance chasing landlord does some repairs himself and the roof caves in, the LLC does not protect him personally. But the company that owns the building is hiring others and, in most cases that protects him personally. And the separation of each building in its own company generally protects the companies from another company's and the lawyers personal mistakes in other areas.

A plane is a thing. An office condo is a thing. Both can become part of civil litigation and depending on the circumstances, the fact whether they are owned through an entity or personally may be relevant.

 

[denverpilot]

On how simple it is. Yes, in most states, creating an LLC is really easy. As is maintaining its existence and good standing. But there is a bit more to maintaining its protections.

Correct but, some aren't operating them for their protections.

And the majority of maintaining the protections, if that's one's goal, are simply accounting and business practices that for the majority of them can be summarized into: Operate it like a business.

Single owner LLCs are nearly worthless in the protections regard anyway.

 

[midlifeflyer]

A plane is a thing. An office condo is a thing. Both can become part of civil litigation and depending on the circumstances, the fact whether they are owned through an entity or personally may be relevant.

My only point is that in both cases, the entity is irrelevant to liability for our own careless or intentional acts.

 

[midlifeflyer]

Correct but, some aren't operating them for their protections.

And the majority of maintaining the protections, if that's one's goal, are simply accounting and business practices that for the majority of them can be summarized into: Operate it like a business.

Single owner LLCs are nearly worthless in the protections regard anyway.

Not always. Depends, for example, on the type of claim being made.