Like a Defective Seatbelt: Your Limited Liability Company's False Sense of Security, says Timothy Berry, JD of Boyer Tax Services, PLLC

LOS ANGELES, April 22 /PRNewswire/ --

Mass Production of Well-Marketed Fallacies

The extremely fashionable and single most powerful asset protection tool, the Limited Liability Company... Like most Americans, there is a good chance you have repeatedly heard advertisements about the benefits of an LLC to protect your most precious assets. Yet have you ever taken the time to research how an LLC stands up to IRS and/or civil court proceedings? In all likelihood, probably not... why would you? Your illzoom.com or "online document mill" sales rep is looking out for your best interest.

If LLCs Don't Provide Asset Protection, Then Why Are They So Popular?

Since its first inception more than twenty-five years ago, the LLC has become the standard, one-size-fits-all, recommendation for asset protection. However, celebrity status was not achieved until 1997 when the IRS enacted the "Entity Classification Election" or most commonly referred to as "check the box" election. This Federal tax change prompted most US States to create or modify their existing Limited Liability Company Act to follow suit. This groundbreaking regulation enabled newly formed LLCs the ability to elect to be taxed as a Sole Proprietorship/disregarded entity (IRS Form Schedule C), Partnership (IRS Form 1065), or Corporation (IRS Form 1120/1120S). Following this development, the entity gained unprecedented popularity.

Simple Planning is Simply Placing Your Assets at Risk

As simplistic as creating an LLC with your state may sound, many LLCs lack the legal substance and documentation required to be considered a separate legal entity. What's more, in many states your LLC may not provide any protection at all, regardless of how detailed your documentation may be.

With all the uncertainties, don't place your trust in money, place your money in a trust!

If you currently rely on an LLC for asset protection, ask yourself the following questions:

1. Do you have an operating agreement? If not its kind of like buying a car without any locks.
2. If you do have an operating agreement was it drafted specifically for you? Or is it a generic boilerplate with fill-in-the-blanks? You really do get what you pay for.
3. Are you and your spouse the only LLC owners? If so, chances are its not going to provide any asset protection.
4. Are you the only LLC manager? The one with sole authority over the account? The recent trend for creditors is to hit you with an asset freeze. If you are the sole signatory on the account, you could be in big trouble.
5. Have you made distributions from the LLC to yourself? Currently there is a one-hundred million dollar case where creditors are trying to make the LLC owners pay back the LLC for the value of any distributions and by the way, a number of the LLC owners have already agreed to pay the funds back!
6. Do you believe your LLC would protect you in bankruptcy?

Tim Berry, JD will address these issues in a webinar you will not want to miss! We will take a journey behind the scenes to discover asset protection fallacies most professional firms keep under heavy lock and key. In addition, learn what you can do to protect your assets using real techniques that work.

Join us for a live online webinar held Tuesday April 27th 2010 at 4:00 PM PT: http://www.boyertaxservices.com/trader-tax-webinars.htm

Contact:  Ryan Gibson, +1-480-588-5466, [email protected]

SOURCE Boyer Tax Services, PLLC