By: Steven B. Kray, Esq., CPA

The success of any form of estate, retirement and asset protection plan requires that it be timely and properly implemented. Since 1978, as a founding and senior partner at Stephens & Kray, and former managing partner of the national law firm, Finley, Kumble Wagner, et al., I have been designing proprietary and sophisticated estate, retirement and asset protection plans that have been tested and evaluated by creditor claimants, that include the IRS, the FTC, judgment business creditors and banks.

Corporate Minute Checklist

On an annual basis, we remind our clients of their responsibility to maintain a minute book and document annual meetings of Shareholders, Directors, Managers and other formal actions taken and recorded either in a Unanimous Written Consent or meeting minutes.

The following are examples of significant transactions which may require action on the part of the entity’s Board of Directors/Managers and recording in the entity’s Director’s/Manager’s Minutes:

Introduction

Intellectual property can take many forms.  Some common forms include trademarks, trade names, servicemarks, service names, logos, business plans, computer programs and designs, marketing information and business ideas.  Intellectual property has been identified by some as the engine that fuels our economy.  It provides the ability to “build a better mousetrap” and the “know-how” to build it.  Protecting intellectual property is always a difficult task.  Federal and state laws that are intended to protect the creator of the intellectual property must also enable the free market to improve upon old ideas.

Introduction

My background as a tax attorney with practical experience in the areas of estate planning and trusts, marital property agreements, executive compensation including both qualified and non-qualified plans, and corporate and partnership formation has given me the tools to mix and match otherwise traditional business and tax planning tools to develop domestic based asset protection planning techniques. Domestic asset based protection differs from foreign based asset protection, which generally requires the establishment of foreign trusts to hold assets. As discussed below and in a separate article that discusses Foreign Spendthrift Trusts in more detail, these two forms of asset protection can be integrated and coordinated with each other. Fundamental to the purposes of contract law, estates and trusts, retirement planning and entity formation is the fact that inherent in these tools and disciplines of law are mechanisms that are intentionally designed to protect and direct wealth to lawfully designated individuals. 

I. Estate Planning with a Living Trust

Most financial planners and estate planning attorneys are recommending the use of the “Living Trust”, also known as the “Inter-Vivos Trust”, as part of a comprehensive estate plan. In states like California, the living trust will in most cases avoid the need for judicial intervention (known as probate) in the administration of an estate and the increased costs resulting therefrom.

Introduction

The following article discusses typical uses of various business entities to achieve asset protection objectives. It is important to note that a fundamental issue when considering the use of a formal entity to operate a trade or business focuses in part on the degree of asset protection the entity will afford. The most typical used of these types of formal entities are Limited Liability Companies, Limited Partnerships and Corporations (C or S).

Introduction

A business owner may eventually face the prospects of selling his or her incorporated trade or business (“Target Corp.”), to a purchaser, who may be a relative, an employee or a third party. Each transaction will have to be structured to accommodate the relationship and business deal between the buyer and seller, as well as the form and tax status of the business being sold.

This article addresses some of the tax concerns for the shareholders of an incorporated entity that operates a business that is being sold to a third party. It is important to remember, as previously stated in other articles by Stephens & Kray, that each planning situation is different. As a result, the lient must be able to rely upon the skill of his or her attorney and advisers who hopefully fully understand the client’s objectives and the parameters of the proposed transaction, and who can thereby devise a structure that will accommodate most if not all of these issues, in the most cost and tax effective manner.