1. To Eliminate Lawsuits &
The Corporate Tools
To Eliminate Lawsuits &
Increase Tax Savings
Your Presenter:
Art McOmber

2. Medical Professionals Most Often Sued Service Occupation5%
United States:
5% World Population
Lawsuits
80%-85% of Lawsuits Worldwide
take place in U.S.A
Medical Professionals Most Often Sued Service Occupation

3. Lawsuits
USA TODAY:
Inheritance
Lottery
Sue Somebody

4. Lawsuits Profession Related Lawsuits “Life Happening” Lawsuits
“Slip and Faller” Lawsuits

5. A Lawsuit is Born… Cause: You Often Cannot Control Motivation:
You Must Always Control

6. A Lawsuit is Born… Cause: You Often Cannot Control Motivation:
You Must Always Control

7. Asset Definitions
High Risk Assets - Can Create a Lawsuit Safe Assets – Not Likely to create Lawsuit

8. Family Limited Partnership
Asset Protection: Step 1
Protecting Safe Assets
Family Limited Partnership

9. Family Limited Partnership
Liability? 1%
ownership
GP:
Total
General Partner
Limited Partners
LP:
None
99%
Ownership

10. Trial Attorney’s Strategy

11. Judge can force a distribution and order the Defendants share of the income to the Plaintiff – Pro Rata
The Charging Order

12. Properly Worded Charging Order
Asset Protection Attorneys changed the wording: Only the General Partner can order a distribution – Non Pro Rata
Properly Worded
Charging Order

13. The Revenge Clause IRS Ruling 77-137 States:
A plaintiff using the charging order will have to pay income taxes on any monetary judgment even if there is no distribution from the defendant.
IRS Ruling Translation:
Plaintiff wins the suit
Plaintiff gets no money
Plaintiff pays taxes on $ they won’t get
The Revenge Clause

14. The Limited Liability Company (LLC)
Asset Protection: Step 2
Protecting High Risk Assets
The Limited Liability Company (LLC)

17. Corporations Use LLCs To Protect High Risk Assets
Small Business Owners, Retail Stores, Mining Companies, Hotel Chains, Real Estate Owners, Medical Practice Professionals
LLCs are Disregarded = No Individual Tax Returns

18. Corporations Use LLCs To Protect High Risk Assets
Small Business Owners, Retail Stores, Mining Companies, Hotel Chains, Real Estate Owners, Medical Practice Professionals

19. Judges can dissolve LLCs
Create Holding Company
The Solution: Create a Holding Company registered in a state that does not allow this to happen…
Alaska

20. Very Few Asset Protection Spcialist Attorneys
American Bar Association:
LESS than .05% of Attorneys in
the U.S. specialize in Asset Protection.

21. NOTHING! Typical Structures What does this structure protect?
S, C (or P) Corporation / LLC
Owns:
Customers
Assets in Own Name (SSN):
NOTHING!
Home
$$$
Building
Equipment
Personal Property
Rental
Property
Vacation Home
$$$
What does this structure protect?

22. Real Asset Protection Structure
Living Trust
Holding Company
“S” Corp.
FLP
Holds all “safe” assets
$$$
“S” Corp
Practice/ Business
LLC
Owns: Equipment
LLC
Owns: Building
LLC
Owns: Rentals
LLC
Owns:
Real Estate
LLC
Owns: Vacation Home

23. Real Asset Protection Structure
Why Living Trust over Will?
PROBATE Wastes Time and Effort
Matter of Public Record
Very Costly
Attorneys the Only Ones Who Win

24. Everyone who wants to avoid the costs and destruction of probate!
Who must have a Living Trust?
Those who have children
Those with disabled beneficiaries
Those with spendthrift beneficiaries
Unmarried couples
Blended families
Estates subject to the estate tax
Everyone who wants to avoid the costs and destruction of probate!

25. Real Asset Protection Structure Rock Solid Asset Protection!
Living Trust
Holding Company
(LLC) Taxed as
“S” Corp.
FLP
Holds all “safe” assets
$$$
“S” Corp
Practice/ Business
Owns: Goodwill
LLC
Owns: Equipment
LLC
Owns: Building
LLC
Owns: Rental Property
LLC
Owns: Home
LLC
Owns: Vacation Home
Rock Solid Asset Protection!

26. $14,500 - $22,000 Asset Protection Fees Living Trust $3.5K-$5K
Holding Company
$1K-$2K
FLP
$5K-$10K
S Corp
$1K-$2K
LLC
$1K
LLC
$1K
LLC
$1K
LLC
$1K
LLC
$1K
$14,500 - $22,000

27. Legally Mine Normal Business
Living Trust $1,000
Holding Company
$1,000
FLP
$1,000
S Corp
$1,000
LLC
$1K
LLC
$1K
LLC
$1K
LLC
$1K
LLC
$1K

28. S Corporation Helps Reduce FICA Taxes
$100,000/yr Income x 15% =
$15,000/year FICA Tax
$70,000 Wage from S Corp
x 15% = $10,500 FICA
$30,000 Distribution from FLP
= NO FICA TAX
Savings of $4,500 per year in FICA Taxes

29. IRS Code: Section 280a Rent Your Primary Home14 Days per Year & the Income is Tax Free
Determining Your Rate: Take the rate per square foot of hotel decorated like your home, times the square footage of your home
National average of hotel rate = 50c per square foot
Example: 3,000 sq/ft home x .50 sq/ft = $1,500/day x 14 days = $21,000

30. IRS Code: Section 280a Rent Your Primary Home14 Days per Year & the Income is Tax Free
Determining Your Rate: Take the rate per square foot of hotel decorated like your home, times the square footage of your home
National average of hotel rate = 50c per square foot
Example: 3,000 sq/ft home x .50 sq/ft = $1,500/day x 14 days = $21,000

31. IRS Code: Section 280a
Your S-corporation will rent your home for Board Meetings, Training and Corporate Events.

32. IRC: Section 280a tax savings
$150,000
x %
Taxes $52,500
$129,000
x %
Taxes $45,150
$7,350 Tax Savings

33. Clients save on average
IRS Code: Section 280a
Your S-corporation will rent your home for Board Meetings, Training and Corporate Events.
Clients save on average
Over $8,000 per year

34. Income Shifting Through FLP1%
ownership
College Tuition of $20K/year
$20K distribution to Child as LP
They pay taxes at 0% - 5%
General Partner
You save $5K - $7K/yr
Limited Partners
99%
Ownership

35. Income Shifting Through FLP1%
ownership
College Tuition of $20K/year
$20K distribution to Child as LP
They pay taxes at 0% - 5%
General Partner
You save $5K - $7K/yr
Parent’s Care Facility $2K/mo.
Limited Partners
Monthly distributions to parents
99%
Ownership
They pay taxes at 0% to 10%
You save $6K to $8,400/yr

36. Turn-key Approach to implement these
Tools and Strategies