[Dan]

I’m with Pres. We live in Texas, bought our coach in Texas, and paid sales tax on the coach in Texas.

[Chas]

Karl,

Can you go into more detail on the asset protection you speak of in regards to registering the coach under a UT LLC? Is this to protect the coach or to protect your other assests from potential risk while using/operating the coach?

I would think that if you are protecting your other assests, it doesn’t matter where or how you register the coach. If you as an individual are operating the coach then you can be find liable for what ever happens when you are operating the coach and therefore your personal assets will be at risk.

If you are moving the coach out of your name as to protect it from your personal liability, then yes that’s interesting. Tell me more.

I will say that I had a discussion with a personal concierge for an Indy Car driver. The guy manages the coach transportation, maintenance, upkeep as well as manages everything for the driver in regards to meals, personal needs, etc.. while at the track for the race weekends. Driver doesn’t have a CDL, which to me was an obvious high risk involvement for both the Indy Car driver and the concierge/coach driver.

Sure on the side of the road all you need to do is tell the officer you borrowed the coach from the owner, but if anything was to happen I am sure a trail of business dealings/1099’s would tell a different story and introduce some liability I wouldn’t want to be involved in (on either side, the employer and the employee). For something like that its just so much easier to get a CDL and have the piece of mind should anything happen.

[Karl]

So, Charles, the simple answer is that with Natalie being at high risk of being sued and some judgments being in the (ridiculous) tens of millions of dollars we are attempting to lower the risk of losing assets should a judgment over the limits of liability coverage ever happen. Technically, what you don’t own they can’t take. The bus will be owned by a Utah LLC managed by an Alaska LLC and registered in the state of Florida. Other assets will be owned by other Utah LLCs and managed by the Alaska LLC.

As a general rule, I try not to engage in “name calling” and while I am not an attorney, I play one on TV and employ several others. I think it to the advantage of everyone to actually read the statutes before rendering an opinion on what they say. Kind of like reading a recipe. As such, I will refer any interested parties to guidance from the Florida Department of Revenue: http://dor.myflorida.com/dor/tips/tip14a01-01.html referencing Florida Statute Section 2128(10). Here is a link to that Statute so that you can read the whole thing : http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0200-0299/0212/Sections/02128.html. I have.

Pay special attention to the part that says “However, the partial exemption may be allowed for corporations or partnerships if the vehicle is removed from Florida within 45 days after purchase and remains outside this state for a minimum of 180 days, regardless of the residency of the owners or stockholders of the purchasing entity.” Then remember that I complied with these provisions and to this day maintain the receipts.

If, after reading this, you still disagree as to the letter of the law I can’t help you understand. If you think those in Florida who FOLLOW THE LAW are crooks, I can’t change your mind. If you just want to pay more taxes, I will gladly cash your check towards the 6 figures that we paid yet again this year.

But I feel safer knowing that because I don’t use the bus for commercial purposes that at least one policeman somewhere in the world understands that it is not a commercial vehicle.

[Karl]

Well done Karl…

[Doug]

Karl…what TV show do you play an attorney?

[Archived]

Thanks Karl,

Kind of what I was thinking you were getting at. of course if you are ever in an incident while operating the coach, you as well as the LLC that “owns” the coach would be potentially at risk. But with your setup your other assets are protected from those risks which is the important aspect here. Great way to silo your assets to protect them individually from risk.

As for the crook part, I’ll hold judgement on that and let the revenuers determine that. I know you arent doing this to dodge sales tax as you already own the coach. To me the reason you are doing this is a 100% valid reason to look at this option.

Did you pick Utah and Alaska for a reason? Could this not all be done in your residence state? From talking with a friend of mine in Utah, it seems that Utah isn’t the most tax beneficial state, was there other reasons to pick those two states and does this form of protection require two different states seperate from your state of residence?

And did you get this setup through a legal firm in Panama? 🙂

[Archived]

Jimmy…just an expression. Running the business I found that I couldn’t afford to (really, I didn’t want to) pay an attorney to read every document for me, so I learned to do it myself. If something was clear I would then hire them to do a much smaller analysis and interpretation.

Charles…Utah and Alaska is because those states have some laws on the books that, in combination, are supposed to make it near impossible for anyone to ever be able to attach your assets. The organziation that does this is based in Utah and has some affiliate in Alaska. They claim foolproof, which I don’t believe. I decided to give it a try because there are also some tax advantages related to renting your house to the LLC for monthly meetings that should save me as much as the services of the firm on a yearly basis.

Montana LLCs may well serve the same purpose and given their sales tax advantages may be a better choice if we were to buy another coach, though I would still follow the rules in Florida if I lived here, i.e. moving it out of state within 45 days and keeping it out 180 days.

We still have another Florida LLC that will also be controlled by the Alaska one, so I can’t foresee any problems with any state’s LLC, though I will say that that one is indeed commercial and I would never want it to own the bus.

[Archived]

If you structure the ownership of your assets for the purpose of “asset protection,” don’t post the information on the internet, for all to see, forever.

[Jimmy]

You will notice that there are no LLC names… 😉