Asset Protection Law Journal : Asset Protection Lawyer & Attorney : Kenneth J. Laino : Schneider Smeltz Ranney & LaFond Law Firm : Trusts, Estate Planning

Poor (or no) estate planning can lead to catastrophic losses of family assets.

Check out the article by Claudia Buck in The Portland Press Herald with some sad stories of families who wasted lots of money due to poor estate planning.  Some simple steps can avoid family fights and save legal fees.  These include earmarking personal property; carefully choosing your executor and trustees; and carefully thinking through the provisions of any trust agreements.  This particular article does not discuss federal and state death taxes, which are another important consideration.  Failing to take these taxes into account in connection with an estate plan can result in staggering losses for many families.

Having basic estate planning documents in place will not provide a complete asset protection plan.  Estate planning is, however, one of the important components of an overall plan to protect your assets.

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UBS (the giant Swiss financial institution) has received a lot of bad press recently in connection with offshore tax evasion schemes.  More UBS clients were indicted earlier this month, but federal authorities are focusing on other financial institutions as well.  Lynnley Browning reported last week in the New York Times that arrests have now been made in connection with an international tax evasion scheme said to involve HSBC.

The latest case involves real estate developers who sold a hotel in New York City and allegedly routed the proceeds through sham accounts in Panama, the Virgin Islands, Liechtenstein, Switzerland and the Bahamas to evade taxes.  The complaint against the real estate developers (filed in federal court in Fort Lauderdale, Florida) describes how federal agents used wire taps in 2007 to record various phone conversations.  This shows that authorities are using more aggressive techniques in fighting offshore schemes.

I was setting up companies in Panama for clients more than thirty years ago.  These entities, however, were used for very legitimate business, tax, and asset protection purposes.  Using offshore companies or trusts to unlawfully evade U.S. taxes or for other unlawful purposes is becoming more and more difficult -- as it should be.

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It is now well settled that a limited liability company insulates the owners from the debts of the company.

It is nevertheless reassuring when a court re-affirms basic LLC protections.  In Dover Phila Heating v. SJS Restaurants 185 Ohio App.3d 107, 2009-Ohio-6187, the Ohio Court of Appeals for the Fifth Appellate District confirmed once again that members of a limited liability company generally have no responsibility for the debts of the entity.  The case was decided in late 2009 and published in the April 5, 2010 Ohio State Bar Association Report.  Citing another Ohio case, Slimans Printing Inc. v. Velo Internatl., Stark App. No. 2004CA00095, 2005-Ohio-173, 2005 WL 100963, ¶ 13, the court noted that pursuant to Ohio Revised Code §1705.48(B),

Neither the members of the limited liability company nor any managers of the limited liability company are personally liable to satisfy any judgment, decree, or order of a court for, or are personally liable to satisfy in any other manner, a debt, obligation, or liability of the company solely by reason of being a member or manager of the limited liability company.

While there is nothing surprising in this recent decision, it is always good to see a court re-affirming the basic protections of a limited liability company.

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A new law signed by President Obama last month makes it much harder for U.S. citizens to evade taxes by hiding money in offshore accounts.  Foreign financial institutions will now face a 30% tax on their U.S. investments if they refuse to provide information about accounts held by U.S. citizens.

None of this is a surprise.  With huge budgets deficits, Congress is closing offshore tax loopholes and making it harder for U.S. citizens to shelter money in foreign jurisdictions.  You can read about the new law in the March 28, 2010 New York Times article by Gretchen Morgenson titled "Death of a Loophole, and Swiss Banks Will Mourn".

As I have mentioned many times before... This does not mean there is anything inherently wrong with offshore trusts-- as long as they are not used for unlawful tax evasion.

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