Why Every American Should Own At Least One Delaware Limited Liability Company

By: Raymond Repinski, CPA

The United States of America is One of the Most Lawsuit-Abusive Countries in the World.

If Not Protected, Every American Could Have His or Her Entire Net Worth Legally Wiped Out By a Lawsuit.

Delaware Limited Liability Companies (LLCs) are an Excellent Way to Protect Your Assets from Predatory Lawyers and Frivolous Lawsuits Arising in Your Home State.

Lawsuits – The Legal Extortion Racket

?“Better to Avoid a Lawsuit Than to Win a Lawsuit” Raymond Repinski

Any “Unprotected” Asset You Own Can Be Legally Seized and Taken Away from You by a Lawsuit.

Like Criminals Who Can Take Your Assets by Extortion, Lawyers Can Take Your Assets by Lawsuits.

Whether You Lose Your Assets to a Criminal with a Mask and Gun, or Lose Your Assets to a Lawyer with a Suit and Tie, You Still Lose.

This is Not to Say Lawyers are Criminals.

Because Unlike Criminals Who Go to Jail when Caught, Lawyers Almost Never Go to Jail.

The Assets You Most Likely Will Lose from a Lawsuit are Your Liquid Assets.

Liquid Assets Include Money in Your Checking Accounts, Savings Accounts, Brokerage Accounts, Money Market Accounts, Certificates of Deposits, Mutual Funds, Stocks, Bonds, and Securities.

Liquid Assets are Not Only Your Most Valuable Assets, Liquid Assets are Your Most Vulnerable Assets.

Unlike Your House (Protected by Homestead Exemptions), and Retirement Accounts (Protected by Federal Exemptions), Liquid Assets “Owned in Your Name” are Not Protected from Lawsuits.

Unless You Move Your Liquid Assets into a Protective Entity Like an LLC, Your Liquid Assets are Exposed to Attack by Lawsuits (i.e. Your Liquid Assets are Naked).

If You Lose a Lawsuit, the Liquid Assets “Owned in Your Name” can be Levied and Seized By the Local Sheriff.

You Will Be Broke.?

“Liquid Assets are Your Most Vulnerable Assets” Raymond Repinski

WARNING: You Should Move the Assets into the LLC Before a Lawsuit Occurs. If You Transfer Assets After a Lawsuit has been Filed, the Assets can be Clawed Back Under Fraudulent Conveyance Rules.

Delaware LLCs are Like Insurance, You Need to Set Up the Policy and Pay the Premium Before an Accident Occurs, Not After.

WARNING: You Should Create the Delaware LLC Before You Get Married. If You Create the LLC After You are Married, the LLC will be Marital Property and You Could Lose Everything to Your Future Ex-Spouse by Order of the Courts.

Remember, the Courts are Made Up Exclusively of Lawyers.

Whereas, If You Create the LLC and Move Your Assets Before You Get Married, the Delaware LLC Will Be Pre-Marital Property and Your Assets will be Protected.

WARNING: Delaware LLCs are not “Get of Out of Jail Free” Cards. LLCs Should Never be Used to Defraud Others, Commit Illegal Acts, or Evade Taxes. The Best Sleep is a Clear Conscience.

WARNING: The Purpose of the Delaware LLC is to Protect Assets from Lawsuits, Not to Conduct a Business. If You want to Operate a Business, then Use an LLC in Your Home State (Example: If You Operate a Nail Salon in Florida, then Operate the Nail Salon as a Florida LLC).

WARNING: You Should Never Ignore a Lawsuit, Regardless How Frivolous or Ridiculous the Lawsuit Sounds.

Seven Reasons to Use a Delaware LLC to Protect Your Assets

You Don’t Want This Guy Showing Up at Your Bank One Day

?1. Assets Not in Your Name

When You Contribute Assets into an LLC, the LLC Becomes the Legal Owner of the Assets, Not You. But You Still Control the Assets.

Because You Do Not Own the Assets in the LLC, the Assets Cannot be Taken from You.

LLCs are?Considered “Legal Persons” or “Legal Entities”. This means LLCs are Treated as Separate and Distinct Legal Persons Apart from Their Owners.

Like Human Beings, LLCs Have the Right to Own Property, the Right to Privacy, and the Right to Due Process of Law.?

The Only Way Lawyers Can Get the Assets in the LLC is by Attempting to “Pierce the Veil” of the LLC, Which is Not Easy - Especially in Delaware.

It’s All About Lawsuits. Protecting Assets from Lawsuits is Why LLCs were Invented in the First Place.

2. Delaware LLCs are Out of State

LLCs Created Outside Your Home State are More Protective than LLCs Created Inside Your Home State.

Because Delaware LLCs are Outside the Jurisdiction of Your Home State (Unless You Live in Delaware), It is More Difficult and More Expensive for a Lawyer to “Pierce the Veil” of a Delaware LLC.

For Example, It’s Easier for a Florida Lawyer to “Pierce the Veil" of a Florida LLC, Than It is for a Florida Lawyer to “Pierce the Veil” of a Delaware LLC.?

The Whole Point of Asset Protection is to Make It as Difficult as Possible for Lawyers to Get at Your Assets.

This is Not to Say Lawyers are Lazy.

However, Lawyers Generally Go After the Low-Hanging Fruit, Like Insurance Companies with the Deep Pockets.

Lawyers Typically Do Not Want to Waste Time Going After Small Potatoes in Well-Protected Delaware LLCs, When They Can Just Sit Around, Wait for an Automobile Accident, and Then Collect a Multi-Million Dollar Settlement from Some Insurance Company.

3. Privacy

“Privacy is the Mother of Asset Protection” Raymond Repinski

Delaware is One of the Only States in the Country Where the Controlling Persons (i.e. Members and Managers) are Not Listed as Public Information.

Because of Privacy, No One Will Know How Much Money You Have, or Where Your Bank Accounts are Located.

By Not Owning Assets in Your Name, You Take Away the Incentive for Lawyers to Sue You.

If a Public Asset Search Reveals You Own No Assets, Chances are You Won’t Get Sued.

Even If You are Sued, You Can Settle the Lawsuit on More Favorable Terms.?

4. You Still Control the Assets

Unlike Trusts, Annuities, and Retirement Accounts, You Retain Complete Control Over the Money in the LLC.

You Can Do Whatever You Want with the Money in the LLC.

You Can Move Money Into, or Out of, the LLC Anytime You Want.

Side Note: John D. Rockefeller Began His Business Career as an Accountant in Cleveland, Ohio in 1855, and Later Became the Second Wealthiest Person in World History Behind Only King Solomon?

?5. Charging Order Protection

Unlike Corporations, LLCs are a Type of Business Entity Protected by “Charging Orders”.

The “Charging Order” is an English Common Law Principal Dating Back Over 400 Years to Protect the Assets of a Partnership from the Creditors of Its Partners.

Today, the Charging Order Laws are Used All Over the United States to Protect the Assets of an LLC from the Creditors of Its Members.

Delaware is One of a Handful of States that Gives Charging Order Protection to Both Single-Member LLCs and Multi-Member LLCs.?

In Contrast, Florida Law Does Not Give Charging Order Protection to Single-Member LLCs.

As Such, Florida Has One of the Weakest “LLC Protection” Laws in the United States. Just Ask Any Florida Lawyer.

Florida’s LLC Laws are Weak Because Florida is a State Controlled by Personal Injury Lawyers, Whose Primary Interest is in Taking Your Assets.

On the Flip Side, Delaware’s LLC Laws are Strong Because Delaware is a State Controlled by Corporate Lawyers, Whose Primary Interest is in Protecting Your Assets.

"Delaware Makes Its Living Protecting Corporations and LLCs" Raymond Repinski

?6. The Delaware Court System

The Court of Chancery is a Special Delaware Court Established in 1792, with Jurisdiction over Corporations, Partnerships, Trusts, and Limited Liability Companies.

The Court of Chancery has a Rock-Solid Record of Upholding Charging Order Protections for Over 200 Years.

In Contrast, Courts in States Like Florida, Have Not Upheld Charging Order Protections.

In 2010, the Florida Supreme Court “Pierced the Veil” of a Florida LLC and Permitted the Assets of the LLC to be Confiscated by the Member’s Creditors (Olmstead v. FTC, Fla. Sup. Ct. No. SCO8-109).

All the Assets of the Florida LLC were Seized and Lost.?

Whereas the Delaware Courts have the Best Reputation for Upholding Charging Order Protections, the Florida?Courts have the Worst Reputation.

The Bottom Line is if You are Looking to Protect Your Assets Using an LLC, Stay the Hell Out of Florida.

“Delaware Courts Can Be Trusted to Uphold the Law” Raymond Repinski

?7. Delaware LLCs are Affordable

You can Create a Delaware LLC for Between $500 - $600 by Using a Delaware On-Line Formation Service. Fees Vary Depending on Expedite Options.

This Cost Should Cover Everything You Need to Open a Bank or Brokerage Account such as State Fees, Document Preparation, Name Search, Certificate of Formation, Federal Tax I.D. Number, Registered Agent Fees, Organizational Minutes, Operating Agreement, and Membership Certificates.

If You Have Any Questions on How to Create a Delaware LLC or What On-Line Formation Service You Should Use, Call Us and We can Guide You Through the Entire Set Up Process,?Soup to Nuts.

ABOUT US

Raymond Repinski CPA is a Tax Consultant and Specializes in Business Entities Like Delaware LLCs to Protect Assets and Save Taxes.??

We Offer Free 30-Minute Telephone Consultations to See if a Delaware LLC is Right for You.?

Raymond Began His Business Career as an Accountant in Cleveland, Ohio in 1983, and Worked Ten Years in Northeast Ohio with the Public Accounting Firms of Arthur Andersen, KPMG, and Howard Wershbale & Co. His Clients Included Delaware Companies such as American Greetings, The Cleveland Browns, JoAnn Fabrics, Diebold, and?OfficeMax.

Raymond Later Worked Eight Years from 1993-2001 as the Corporate Tax Director for Two Delaware, Public Companies Headquartered in the Tampa Bay Area.

Since 2001, Raymond has Served as a Tax Consultant for Delaware Companies all Over the United States, Including New York, Ohio, California, Florida, Texas, Connecticut and Tennessee.

Raymond Graduated with a Bachelor’s Degree in Accounting from Miami University in Oxford, Ohio, and Passed the CPA Examination on the First Attempt in May 1983.

Side Note: Raymond is a Certified Chess Instructor with the National Scholastic Chess Foundation Since 2018.

?Copyright ? 2021 RSR Accounting, all rights reserved. This article provides general information and does not constitute legal or tax advice. This article is accurate to the best of the author’s knowledge as of the article date. This article should not be viewed as a substitute for advice from a legal or tax professional.