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Law Offices of Givner & Kaye Newsletter | January Issue
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We have previously written to you about the problem that limited liability companies have with creditor protection after the January 1, 2014, enactment of the California Revised Uniform Limited Liability Company Act. That problem is that, in a lawsuit against a member, an LLC is not as protective of the owner's interest as is a limited partnership.
There is now a new reason to transition from LLCs to limited partnerships: In Denman, 513 B.R. 720 (W.D. Tenn., July 24, 2014), the court held that an LLC operating agreement is not an "agreement" as contemplated by Bankruptcy Code Section 365. As a result, a bankruptcy trustee for a member of the LLC can exercise all of the debtor-member's rights in an operating agreement, including voting to dissolve the entity.
Professor Carter Bishop of Suffolk University Law School (as quoted by Jay Adkisson, Esq., in his December 19, 2014, column in Forbes) predicts "that this is so important...that if Denman is correct, many if not most manager-managed LLCs will simply form or convert to a limited partnership where the [bankruptcy] trustee may become a limited partner without doing any damage to the partnership."
Please call us if you would like to discuss changing your entity structure.
Best regards,
Bruce Givner
Owen Kaye
Kathleen Givner
Neda Barkhordar
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Featured Article: How to Make Your Irrevocable Trust Flexible
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Irrevocable trusts are sometimes intimidating. Why would I want to set up a trust that I can't revoke? Even though you cannot revoke an irrevocable trust, there are many ways that it can be flexible.
1. As the grantor (trustor, settlor, creator), you can retain the right to remove the trustee and name a new one, at any time, without giving a reason. With that power you can be fairly certain that the trustee is likely to follow your "suggestions."
2. When you create the trust you can build in a provision to have a "protector" appointed. A protector can be given powers that you cannot have, e.g., the power to remove a beneficiary; the power to add a beneficiary; the power to change the allocation among the beneficiaries (instead of 1/3rd to each of 3 children, it might be 80% to one child and 10% to each of the other 2); and the power to change the manner of distribution to the children (instead of ½ of the principal at ages 25 and 30, it might become 1/4th of the principal at ages 25, 30, 35 and 40).
3. You can have the trustee invest the assets into a single member LLC of which you are the manager (the only one who signs on the bank account).
4. You, as the grantor, and the children, as the beneficiaries, can amend the trust without court approval.
5. If there is an irrevocable trust that has provisions that you do not like, set up a new irrevocable trust that you like and give the new trust enough assets to buy the assets from the "bad" trust (this works well for an insurance trust).
In conclusion, if you need or want to set up an irrevocable trust for your heirs, there are ways to do so that will make you comfortable. If you have an irrevocable trust that bothers you, let's talk.
To learn more about the benefits of irrevocable trusts, please contact us today.
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YouTube Videos
We post new videos on YouTube each week filled with advice and tips. For more, click here.
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| Attorney Spotlight: Upcoming Engagements |
On January 10 Bruce Givner will be speaking on "Estate Planning for Individuals with International Assets" for the Chennai, India, office of Prabha Srinivasan, C.P.A. This will be done by Skype. Prabha practiced in Los Angeles for 15 years before moving to Chennai where she represents U.S. citizens and residents.
On February 12 Bruce Givner will be speaking on "International Estate Planning" to the South Bay Estate Planning Council in Torrance at 7 a.m.
On February 24 Bruce Givner will be conducting a national webinar on "Retirement Benefits in The Non-Taxable Estate" at 10 a.m. Pacific for Strafford Publications. (contact us for details)
On February 26 Bruce Givner will be speaking on The Intersection of Theoretically Prophylactic Asset Protection Planning and a Competent Litigator for "The Gathering 2015" at the San Diego Marriott Del Mar.
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If there is a chance that you will sell an appreciated piece of real property or a business in a few years, the best time to meet to talk about it is more than 2 years before the sale. That will give you the greatest number of options to reduce and even eliminate the federal and state tax. Once your time period is less than 2 years, the number and quality of options decreases dramatically.
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Bruce Givner & Owen Kaye |
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Upcoming Thursday Insights Series Seminar:
Everything You Wanted To Know About Going to Jail for Tax Problems But Were Afraid To Ask with Bruce Givner, Esq.
January 15, 2015
2:30pm-4pm
There are many possible opportunities to go to jail for tax
problems. These include penalties in Section 7201 for Tax Evasion (did you know that the failure to pay penalties
and interest is also tax evasion?); Section 7202 for Willful Failure to Collect or Pay Over Tax (did you know that
failing to pay payroll tax will land you in jail?); among others. There are also Related Offenses under the Criminal Code including conspiracy, false statements, false claims, perjury, mail fraud, aiding and abetting, failure to file currency transaction reports and related "structuring" violations and failure to file FBARs. We will also discuss the California Model for largely, but not completely, following the federal tax criminal rules.
Join us in the office or online via webinar, where you can watch the folks in the room listen to and question Bruce.
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 For almost four decades, our experienced Los Angeles estate planning, asset protection and expert tax attorneys have met each client's unique planning needs by collaborating with our longtime partners - attorneys, accountants, business managers, financial planners, stockbrokers and insurance professionals. Contact Givner & Kaye today! |
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January, 2015
Compiled by Givner Strategies, LLC
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Copyright © 2014. All Rights Reserved.
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