Frequently Asked Questions

If you cannot locate the answer to your question please do not hesitate to call our office at 888-521-6577 ext. 1 and speak with one of our experienced consultants.  Your question is likely to be shared by others and you may find it addressed in future versions of this free guide.

PRIVATE NEVADA LLC'S

Q:         I can buy a Nevada LLC online for just a few hundred dollars.  How is it different from the Ultra Protective Nevada LLC you form?

A:         Buying a LLC online is great if you are looking for an entity to run a business and don’t need privacy or asset protection.  However, for you to purchase such a LLC you will need to submit your name and perhaps Social Security Number (SSN) and all privacy will be lost.  In addition, how to structure the ownership of the LLC and your assets and how to draft an asset protecton oriented operating agreement for the LLC are more important than the entity itself.  APCG can assist you in structuring your owenership interest and assets and draft an asset protection specific operating agremeent for your Ultra Protective LLC in ways that will protect your assets. 

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Q:         How do I maintain financial privacy?

A:         You will need to take advantage of Nevada limited liability company law that allows you to have someone other than yourself listed as manager of the LLC.  A person acting in this capacity is known as a nominee manager.  In addition ownership information is not a matter of public record in Nevada.  Therefore, it is extremely difficult for anyone to find out the ownership information for your LLC.

Q:         Can I use my friend as a nominee?

A:         You can use anyone you please as your nominee manager,

Q:         I am having a hard time understanding why Nevada allows such privacy and is so different from other states.  Is what they are doing legal?

A:         Remember you are dealing with the same state that has legalized gambling and prostitution.  Even if you believe these institutions to be immoral it does not change the fact that Nevada deems them to be legal.  The same goes with their corporate law.  It has been instituted by the lawmakers of the state of Nevada and you can rest assured that if you take advantage of these entities you are in good standing with the law.

Q:         Will Nevada be forced to dismantle these privacy provisions? 

A:         Of course anything is possible but there is no indication at this time that Nevada corporate law will be revised.

First, Nevada, not the federal government, writes its corporate code.

Second, Nevada presently forms over 5,000 corporations per month, which is more than any other state.  Considering the population of Nevada is only about two million people, you can be sure that a good percentage of these corporations are being formed by people outside the state who recognize the advantages of forming Nevada entities.  To change the laws of Nevada would certainly end this very healthy revenue stream for the state of Nevada.

Q:         Can I use a Ultra Protective Nevada LLC to run a business?

A:         These Ultra Protective LLC are mainly for asset protection only.  To run a business you are better served to use a home state entity such as an LLC or an S Corporation. You can use an Ultra Protective Nevada LLC to hold excess funds generated by your home state entity or hold valuable business assets and then lease the assets to the operating entity..

Q:         Can I use an Ultra Protective Nevada LLC to protect my IRA?

A:         Unfortunately not.  However, IRA and other retirement plans are generally exempt from state court judgments. The problem with IRA's is that they are tax advantaged accounts. To keep their deferred tax status, they must remain in your name. If you absolutely need to protect the money in your IRA, you will have to take the money out of your IRA account, pay the early withdrawal penalty (10% if applicable) and the deferred income tax, then put the money into an Ultra Protective Nevada LLC account.

Q:         I have heard Delaware corporations are just as good as Nevada corporations.  Are there any differences if any?

A:         More than 50% of publicly traded corporations in the U.S. are Delaware corporations so it is no surprise that people think ‘Delaware’ when it comes to corporations.  However, when contemplating asset protection, the last thing you want is to be ‘public’ when your goal is financial privacy. 

Q:         Do Nevada LLCs have to file tax returns?

A:         Nevada has no state income tax; therefore no return has to be filed in Nevada.

Nevada LLC, like any LLC, can be treated as a pass through entity for Federal tax purposes. Therefore, you can elect to pay taxes on your LLC income on your personal tax returns.

Q:         Are there any tax savings from using an Ultra Protective Nevada LLC?

A:         We do not form Ultra Protective Nevada LLCs for tax purposes but purely for asset protection.  Since an LLC can be elected as a pass through entity for Federal taxes, you will pay Federal taxes on any profits generated by your assets as if you own the assets directly.

Q:         Can I trade stocks with an Ultra Protective Nevada LLC?

A:         Yes, you can have trading authority over a brokerage account set up in the name of an Ultra Protective Nevada LLC.

Q:         Is APCG a law firm?

A:         No, we are not a law firm. Therefore we do not offer legal advice.

Note that whether we are attorneys or not makes no difference in the asset protection arena.  Real asset protection strategies are not taught in law school or practiced by most lawyers.

Q:         Do I need to have the nominee your firm provide to act as the manager of my Ultra Protective Nevada LLC?

A:         You can use anyone you trust as a nominee. 

Q:         Have LLC/corporations with your nominee been attacked in court?

A:         Yes, many times over the years.  Although these LLC/corporations can prevent many lawsuits from being initiated in the first place there will be times when they are put to the test.  The good news is not a single LLC/corporation has been busted or an asset been lost under our watch.

Q:         What prevents the nominee you provide from stealing the assets held by the private corporation?

A:         This is a great question and one we get frequently.  Officially the nominee has no right to any of the assets of the LLC since he does not own the LLC.  In order to give you financial privacy, however, you can request to have the nominee act as the signor on the bank account if you wish and the nominee will sign documents on behalf of the LLC.  This, of course, does give him signatory access to the assets of the company.

            If you are uncomfortable with the idea of a nominee unknown to you having signatory access to your assets, you should choose a nominee that you know and trust instead.

Q:         What if your nominee dies or is no longer able to act as the manager for my company?

A:         Obviously all of us would rather stay above ground but as the saying goes, “The graveyards are filled with indispensable people.”  We have several nominees that can act on your behalf. In the event of his untimely demise or incapacitation, another one can be put in place immediately.  The process is simple, a new List of Officers for the company will have to be updated with the Nevada Secretary of State and new signature cards signed and submitted to the bank.  You can, of course, replace our nominee at any time with your own nominee. 

EQUITY STRIPPING

Q:         I have never heard the term “Equity Stripping” before, is it a legal term?

A:         Equity stripping is merely a term that has been coined to denote a mortgage or encumbrance you place on your personal assets.   It looks and acts identically to a 3^rd party mortgage but you can add or remove the encumbrance at any time.

Q:         Why use Equity Stripping instead of transferring the asset into the LLC?

A:         Many clients do choose to move their assets into Ultra Protective Nevada LLCs/FLPs to insulate their assets from any challenges they may personally have and vice versa.  The downside to actually transferring some assets into a company arises when an asset has its own liability potential.  For example, your home can be a potential source of liability because someone could slip on your front steps and break a leg.  Since the steps of the home were the “cause” of the accident, the injured can go after the assets of the company that holds the home and that includes the home itself.  For this reason equity stripping is another method to protect real estate when transferring the real estate property into a LLC is not a better strategy.

Q:         What kind of assets would you recommend putting into a LLC then?

A:         Cash, securities and encumbrances as well as real properties can be held safely by a LLC.  Please keep in mind that assets that can incur liabilities should be separated from assets that are safe such as cash and securities.  You do not want the liability from one asset such as a rental property to put your cash and securities at risk.

Q:         How many assets can be owned or encumbered by one LLC?

A:         As many as you want. However, we suggest that you only hold two or three properties or liens with one LLC although the ideal is one property for one LLC.

Q:         How long does it take to implement Equity Stripping?

A:         Our experienced staff can prepare a Promissory Note and a Mortgage Lien (Deed of Trust in some states) in two to three days for a reasonable fee.  You file the necessary document with the County Recorders Office (in the county the asset is located) and you can have your assets encumbered within a week.

Q:         I may want to refinance or sell my home, how can I remove the Equity Stripping Lien?

A:         Once again our knowledgeable staff can draft the necessary re-conveyance documents for you in a day. By filing this document with the County Recorder the original note is marked ‘Cancelled’  and you can have the lien removed as quickly as it was put on. 

Q:         How large a lien can I put on my home or investment properties?

A:         The sky’s the limit; however, we would encourage you to have a lien that would look “reasonable” to a third party.  At a minimum you will want to encumber any exposed equity in the property and ideally the lien will be large enough to allow some room for the equity to expand.  The casinos in Las Vegas are typically liened at least 25% over the value of the real estate so this provides you with an excellent rule of thumb.

Q:         Can I put a lien on the assets of my business?

A:         Absolutely.  To encumber the assets of your business you need to prepare a promissory note, a UCC-1 and a security agreement.  All assets and the amount of the encumbrance would be listed and filed.  All of these documents can be prepared for a reasonable fee by our staff.

Q:         Are these ‘Equity Stripping Liens’ real liens since there is no exchange for value? 

A:         Yes, they are absolutely legitimate liens because the value exchanged is the increase of your owner's equity in your own LLC or FLP.  They are filed with the county recorders office and they are enforceable by the third party that holds the lien, the Nevada LLC or FLP.  For the value of the lien you allow the LLC/FLP to put on your property, you are receiving in exchange the same amount of value in the form of owner's equity in the LLC or FLP.

OFFSHORE CORPORATIONS

Q:         Are offshore corporations legal?  I have heard a lot of scary things about offshore and I don’t want to get into trouble.

A:         Owning or doing business with an offshore corporation is perfectly legal.  If it were not companies like Boeing, Microsoft and Wal-Mart would have a tough time doing business.

            What is illegal is using an offshore corporation to evade taxes, launder money and finance terrorism.

            As a beneficial owner of an offshore account you will have to supply identification and reference letters in order to set up the account.  It is also your responsibility to make sure all taxes due the Internal Revenue Service are paid on income generated by the offshore company.

            With that said, it is good that you enter the offshore arena with your eyes wide open because there are a lot of predators ready to strike at the unsuspecting.

Q:         You said I have to supply identification?  Doesn’t this defeat the purpose of having a private corporation in the first place?  What kind of information do I have to I have to provide?

A:         You will need to provide the following:

1.     One NOTARIZED photocopy of a passport and/or a copy of a current driver’s license.

2.     An ORIGINAL Bank reference letter stating the banker has known and/or has done   business with the signer and/or beneficial owner for at least three years. 

3.     A completed and signed Bank New Account Application. 

4.     An original utility bill that shows that you reside at the address you enter on the application.

Although this may sound like a compromise of your privacy you will be happy to know that this information is for internal use only and not accessible to outsiders without going through complicated legal channels in the offshore jurisdiction.

You will also be happy to know that these documents act to safeguard who has access to the account.  Only you will be able to access the account with proof of your identity.

Q:         I have heard of offshore banks where you can set up the account using an alias.  Why should I work with you and give up any information at all?

A:         You are, of course, free to use anybody you want but be wary of any offshore bank or brokerage house that does not require identification.  It is safe to say they are not compliant with international banking laws and should be deemed an unsafe place to park your money.  Many illegally operating offshore banks have been shut down over the years and the depositors have lost ALL their money.

Q:         Do I really need an offshore corporation?

A:         For most people the answer is “No”.  A Nevada LLC or FLP can provide sufficient protection with less expense.  With that said if you are looking for maximum protection outside of the jurisdiction of the United States then an offshore corporation may be a logical choice for you.  However, if you have less than $250,000 going offshore is likely an unnecessary move.

Q:         Can I reduce my tax liability by sending money offshore?

A:         If you are looking for tax advantages you are looking in the wrong place.  All income generated by an offshore corporation must be reported and the associated taxes paid.  Those looking to avoid paying taxes by going offshore are often rewarded with a new wardrobe of orange jumpsuits.

Q:         Is there a problem with moving money in and out of the country?

A:         Moving money in or out of United States is a very simple process via wire-transfer.   Moving money is not a taxable event in itself.  It is the generation of income that is a taxable event.  As long as you are moving after-tax dollars you are free to move it at will as long as you are not moving the money for the purpose of committing an illegal act.

Q:         I heard that the IRS tracks all the movement of money.

A:         There is a trillion dollars moved by wire every single day so is highly unlikely that the IRS would be able to track every single wire transfer.  With that said, you will still want to make sure all taxes are paid so that the IRS has no reason to look twice.

Q:         Can I use an offshore corporation to protect my home and investment real estate?

A:         Offshore corporations are suited for protecting liquid assets, such as cash and securities not fixed assets such as real estate.  To protect your home or other fixed assets, a private Nevada LLC, limited partnership or an Integrated Estate Planning Trust will be your best choice.

TAXES

Q:         I have been researching various entities to protect my assets and have heard that some entities not only protect assets but can also reduce and even eliminate my tax liability.  I am excited about the prospect of not paying taxes but am I missing something here?

A:         Believe me, if there was a legal way to not pay taxes, we would be thrilled to offer such a miraculous entity.  Unfortunately, it does not exist. Anyone who tells you that you can avoid paying taxes altogether is setting you for a very long, unpleasant and expensive confrontation with the IRS which can even lead to incarceration. 

We are familiar with many of these tax scams but there are too many to list.  To make matters worse they keep morphing as the IRS takes them down one-by-one. To get updated information about these scams go to the IRS website at www.irs.gov and type in “Fraud” as the keyword.  For more information on abusive trust schemes access Publication 2193 from their site.

If you are still not sure if the entity you are considering is legitimate our experienced consultants can usually point you in the right direction by calling them at 888-521-6577 ext. 1.

AFTER SALES SERVICE & SUPPORT       

Q:         How do I know APCG, Inc. is a legitimate company?

A:         Asset Protection Consulting Group is a member of the Better Business Bureau of Northern Nevada and you are welcome to contact them to verify we are members in good standing.  Our website, www.apcg.net is a member of the BBB Online Reliability Program. You can check our BBB Online record to see that APCG has never received any complaints.

Q:         I can clearly see the power of the financial privacy you offer but I am always concerned, especially when dealing on the Internet, that once I send the fees to form my entities that  I will be hard pressed to get any after sales support.  These strategies seem simple enough but I would be a fool to think I can put what I need in place on my own.

A:         You are not alone with this concern.  Although part of the beauty of these strategies is their simplicity, we recognize that you will likely have several questions.  With this in mind we pride ourselves in having put into place a very knowledgeable and accessible team that is ready to answer your questions during business hours each day.

HAVE OTHER QUESTIONS?

Please call our office at 888-521-6577 ext. 1.  Our experienced consultants are ready to answer your questions.

We look forward to serving you!

DISCLAIMER:  All information contained in this website is for education purpose only.  Asset Protection Consulting Group, Inc., its agents and affiliates cannot and will not render any legal or tax advice of any kind, unless said agent is duly licensed by the applicable state and/or federal authority to give said advice.