Plus over 90 significant updates to Existing Sections and Forms!

Transcription

1 MAY 2014 Update ASSET PROTECTION STRATEGIES & FORMS by DUSTIN I. NICHOLS, MARK A. ZIEBOLD, AND ALAN R. EBER Highlights With the assistance of two new authors, this year s update to Asset Protection Strategies & Forms adds seven new sections and updates more than 90 sections and forms to keep you up-to-date on recent developments in the world of of asset protection, including the effects of the proposed amendments to the Uniform Fraudulent Transfer Act that, if approved, will go into effect in New Sections: Chapter 2, Fraudulent Transfers, Ethics, & Bankruptcy and Retirement Plans 2013 Proposed Amendments to the Uniform Fraudulent Transfers Act (including accompanying form CD2-2) [ 2:14] Centralized Management of Assets [ 2:95] Business Succession Planning [ 2:96] Chapter 3, Strategic Planning Unfair Competition Under Business & Professions Code [ 3:06] Chapter 4, Domestic Trusts Trust CFO [ 4:123] Investment Advisor [ 4:124] Chapter 8, CORPORATIONS Entity Serving as Officer or Officers [ 8:09] Plus over 90 significant updates to Existing Sections and Forms! And More! Access forms ONLINE! jamesforms.com See blue pages to learn more

2 Asset Protection Strategies & Forms Dustin I. Nichols Mark A. Ziebold Alan R. Eber Contact us at (866) 72-JAMES or visit

3 Asset Protection Strategies & Forms F-2 James Publishing Copyright 2014 James Publishing, Inc. ISBN: All rights reserved. This publication is intended to provide accurate and authoritative information about the subject matter covered. It is sold with the understanding that the publisher does not render legal, accounting or other professional services. If legal advice or other expert assistance is required, seek the services of a competent professional. Persons using this publication in dealing with specific legal matters should exercise their own independent judgment and research original sources of authority and local court rules. The publisher and the author make no representations concerning the contents of this publication and disclaim any warranties of merchantability or fitness for a particular purpose. We view the publication of this work as the beginning of a dialogue with our readers. Periodic revisions to it will give us the opportunity to incorporate your suggested changes. Call us at (866) 72-JAMES or send your comments to: Revision Editor James Publishing 3505 Cadillac Ave., Suite P-101 Costa Mesa, CA PUBLISHER S STAFF Managing Editor: Donna Cole Production Editor: Adam Pringle Production: Adam Pringle and Anne Loughman Typesetter: Alexandru Oprescu Revision 1, 2/10 Revision 2, 2/11 Revision 3, 2/12 Revision 4, 5/14

4 F-3 About the Authors About the Authors Dustin I. Nichols is the owner of the Law Office of Dustin I. Nichols, PC. Mr. Nichols practice emphasizes the areas of integrated corporate, estate and asset protection planning; trust administration; corporate counsel representation; business formation; estate and gift tax planning; trust litigation; and transactional drafting. Mr. Nichols and Alan Eber are former law partners, jointly providing clients with comprehensive domestic and foreign integrated estate and asset protection planning strategies and structures. While with Mr. Eber, Mr. Nichols assisted in pioneering the development of both the Flexlit and Heir Directed ILIT, advanced fully discretionary irrevocable life insurance trust designs. Mr. Eber and Mr. Nichols still work together on select engagements. Mr. Nichols is a Distinguished Faculty Member for Lorman Education Services, a national provider of continuing legal education seminars, and often speaks on the topic of integrated estate and asset protection planning. Mr. Nichols has been published in such law publications as The Orange County Lawyer and conducts private seminars for large CPA firms and financial professionals on estate strategies and advanced wealth preservation techniques. Mr. Nichols received his JD from Western State University College of Law after receiving a BA in political science from California State University, Northridge. He is a Member of the California State Bar, is Certified before the U.S. Tax Court, and is licensed to practice before the United States District Courts in the Eastern and Central Districts of California. He can be reached at or Dustin@DINProtectLaw.com. Mark A. Ziebold is the owner of the Ziebold Law Group. He concentrates his practice in the areas of estate planning, trust administration, charitable organizations, asset protection, business formation, athlete representation, family office services, and estate, gift, income, and generation skipping tax planning. He has worked with private clients and institutions to implement premium financed life insurance strategies. He also serves as a private fiduciary on various types of irrevocable trusts and has obtained a license to act as a contract adviser for NFL players. Mr. Ziebold is a frequent speaker for private companies and for attorney and CPA continuing education events. He has provided training and seminars for Goldmark Financial Services, the Orange County Chapter of the Asset Protection Society, and the Tax and Financial Group, among others. Mr. Ziebold received his JD and LLM (Taxation) from Chapman University School of Law after receiving his BA in economics from Baylor University. He has obtained the Certified Asset Protection Planner and Certified Wealth Preservation Planner designations from the Wealth Preservation Institute, and is a member of the California, Nevada, Arizona, and Texas State Bars. Mr. Ziebold is a certified by the State Bar of California as a specialist in taxation and in estate planning, trust, and probate law. He can be reached at or Mark@zieboldlaw.com.

5 Asset Protection Strategies & Forms F-4 Alan R. Eber, the original author of Asset Protection Strategies, received his Juris Doctorate from the State University of New York, his Master of Law in Taxation (LL.M.) from New York University, and studied international taxation at the University of Brussels. He is admitted to the state bars of New York and California. His firm website is: assetprotectionlaw.com. The international part of his practice is located at: offshoreprotectiontrust.com. Mr. Eber practices law in the fields of foreign and domestic asset protection and estate planning, trusts, business structuring, and wealth strategies. He is a pioneer in the asset protection field and a highly sought after speaker on estate and wealth planning and protection. Since 1974, Mr. Eber has assisted clients in establishing a wide variety of wealth preservation structures. Mr. Eber s books on basic asset protection, family limited partnerships, and offshore planning have been adopted by the Education Foundation of the California Society of Certified Public Accountants ( Foundation ) and the American Institute of Certified Public Accountants (AICPA) for use in California and throughout the United States for professional education classes. His eight-hour course on basic asset protection was introduced to the Foundation in 1994 and was sponsored by them for presentation to their members over 45 times in the following four years. He is the author of numerous articles concerning asset protection techniques. His article The Asset Protection Strategist has become a classic for both the lay and professional reader. Currently Mr. Eber is presenting seminars on Advanced Asset Protection and Techniques and Domestic and International Trusts for the National Business Institute (NBI), the Lorman Group, and numerous other groups. As of this year, Mr. Eber formed Eber & Nichols, a firm focused on helping Coachella valley developers and wealthy individuals in the Palm Springs area protect their holdings. He can be reached for consultation by at: AlanEber@AssetProtection Law. com or Acknowledgments This book would not have been possible without the generous sharing of ideas of dozens of estate planning and asset protection practitioners who have taught me more than I could set down in just a couple hundred pages. Although I can t name them all, I can thank a few who have helped me in profound ways: Hugo Ribadeneira. Mr. Ribadeneira is an outgoing, warm person with an ability to create unique solutions. He calls himself a Master Strategist. In some cases, I have found him to be exactly that. Alexander Bove. I cannot search for materials without finding an article authored by Alexander. He is a scholar, a professor, a practitioner and (to those who have the privilege of knowing him) a gentleman. Jackie Jensen. Ms. Jensen has the ability to take complex issues and techniques and present them in ways her clients can understand. Ian Kilpatrick. Mr. Kilpatrick brings honesty and integrity to complex multi-national task structures. Jay Mitton. In the infancy of the practice of Asset Protection, Jay was there providing information and protection. I always enjoyed watching his marketing presentations. I learned watching him in front of an audience, he has reminded me that before you can protect a client, you needed to educate the client. All of these people and many more have inspired and taught me how these techniques can be creatively used for protection from a sometimes abusive civil liability system. I am very thankful to all of them and to all the others who have contributed to this work. Every month I find more colleagues who want to publish their thoughts and techniques. To this end, I invite all comments, contributions, and disagreements you have with the information presented in this book. Alan Eber

6 F-5 Disclaimer Disclaimer This book is intended to provide or to include a non-technical explanation of certain income tax and estate tax concepts for educational purposes only. It is sold with the understanding that neither the authors or the publisher are engaged in rendering any legal, accounting, investment, or other professional services to or for the reader. If legal, investment, or other professional advice is required, the services of a qualified professional person should be sought. The information herein does not constitute authoritative support for any tax matter discussed herein. The only sources of authoritative support for tax matters are pertinent sections of the U.S. Tax Code, the Internal Revenue Code, IRS Regulations, rulings or technical advice memoranda, and any court cases that bear on the subject matter. Circular 230 Notice This book is not a reliance opinion or a marketed opinion. This book and its contents were not intended or written by the authors to be used, and cannot be used, by anyone for the purpose of (i) avoiding U.S. tax penalties; or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed or stated herein. This report and its contents are not treated as a marketed opinion because (a) the advice was not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer; (b) the advice was not written to support the promotion or marketing of the transaction(s) or matter(s) addressed herein; and (c) the taxpayer should seek advice based on the taxpayer s particular circumstances from an independent tax advisor. [31 C.F.R (b)(4)(ii), 10.35(b)(5)(i), and (b)(5)(ii)(a), (b) and (c).]

7 Asset Protection Strategies & Forms F-6 Introduction Property Must Be Secure or Liberty Cannot Exist John Adams Americans have freedoms others can only dream about. Our laws are strong in protecting our property rights. Our laws give similar strong rights to those who would take our property from us. The same law that allows others to take our property can be used to protect our property. A man can either protect his family or allow them to be the lambs that may either go to the slaughter if sued or be safe because no creditor arose. Each must choose the path for himself and his family. Some take action, some suffer from ostrich-like consciousness. The laws of Asset Protection allow those who wish to exercise their right to protect their property to do so. A right unexercised is the same as no right. If not exercised, it was you who let them take your assets. Use or do not use your rights. Your choice! It is not from someone else s use of the law that your assets are lost. It is your failure to use the law to protect your assets well in advance of someone else using the law to take your assets. Only those who fail to act will lose. Your choice. To assist you in starting your journey toward becoming asset-protected, protection techniques and forms are discussed and provided herein. The Right to Be Left Alone Is the Most Comprehensive of Rights and the Most Valued by Civilized Men. Justice Louis D. Brandeis, 1928 The right to be left alone? The most valued by civilized men? Take nothing for granted. History shows nothing is simply granted. Privacy, once so valued, has been taken for granted. As a result, it continues to be taken from us. Are we not concerned with continued encroachment on our most valued right? That right is ours only through its exercise. Each can use the law to begin to regain for his and his family s benefit that most valued [right] Privacy. Only those who fail to act will lose. Your choice. Winning Is Not a Sometime Thing; It s An All the Time Thing. You Don t Win Once in a While; You Don t Do Things Right Once in a While; You Do Them Right All the Time. Winning Is a Habit. Unfortunately, So Is Losing. Coach Vince Lombardi You Work All Your Life for a Little Peace of Mind, a Little Piece of Land to Call Your Own, and Something to Leave Your Spouse and Children To Better Their Lives.

8 F-7 Introduction But the Land Does Not Belong to You Try Missing Your Tax Payments, and With the Proliferation of Lawsuits, the Best of Yesterday s Estate Planning Techniques Are Useless if the Plan s Assets Are Lost To Creditors or Divorce. PLANNING IS NOT COMPLETE UNTIL YOUR ASSETS ARE PROTECTED. Just as the purpose of preventive medicine is to maintain your physical health, asset protection is preventive law to maintain your asset s financial health. Asset Protection techniques expand upon traditional methods of estate planning. Instead of only planning to protect your assets from those who would take them from you upon death (probate, estate, and generation skipping transfer taxes), you also plan to protect them from those who would take them from you (and your loved ones) during life (creditors, predators, divorce, and taxes). This book will: 1. Introduce you to asset protection tools and techniques available in the areas of international and domestic planning. These tools and techniques are the legal and equitable protective entities we use. Techniques plan the integration of tools into protective strategies. The sum is stronger than its parts. But as our new California governor says, Less is more, and a well-conceived plan should be tightly woven. It is in the strategic integration of these tools that a plan is born. It is through strategic integration, not the number of entities used, that a plan is successful. Some of the tools that will be discussed are: domestic and offshore trusts, limited liability companies, domestic family limited partnerships, and offshore Private Placement Life Insurance [PPLI] and Captives. Chapter 3 is devoted to those who want to become asset protection strategists. 2. Provide you with forms and clauses to strengthen your planning and to assist your implementation of those techniques. 3. Provide you with a working knowledge of how the various advanced asset protection strategies actually work in particular circumstances. For example, in the case of LLCs (and FLPs) techniques, we will explain why they may not work as well as thought. They are only beneficial for some (certainly not all) clients, and many times, they cannot protect unless integrated with other entities. We will explain how to use them best by integrating them as part of the techniques that together form the plan. My Asset Protection Background I was introduced to asset protection in I survived the Tax Reform of I was a general partner on about a hundred syndicated real estate partnerships. I became very aware that I could lose my assets. I honed my asset protection understanding during several years spent with the collapsing banking industry on real estate workout issues. I saw many prominent real estate and oil and gas general partners cover themselves with these techniques. However, the use of these techniques is even more powerful when the horizon is clear. Alan Eber