As an attorney and financial planner specializing in working with business owners and
professionals in the area of Wealth Protection, we are often asked which "one tool" is the
most important for any overall asset protection plan. While the answer to such a question
inevitably depends on the client's goals, in our practices, the one tool which we most
often employ for our clients is the family limited liability company (FLLC).

USING THE FLLC TO PROTECT ASSETS
An FLLC drafted and maintained by an asset protection expert can be used to protect
assets in the following ways:

� Isolate dangerous assets and business claims
Like the corporation, those who control the FLLC (called "managers") or own the FLLC
(called "members") are not liable for the acts or debts of the FLLC. In other words, a
manager's or member's personal wealth is isolated "outside" the range of
general FLLC debts and liabilities. This provides key protection for clients using
the FLLC to own dangerous assets (like cars and rental real estate) or to operate
businesses. Using the FLLC, the client's personal wealth is protected from these lawsuit
risks.

� Protect personal wealth from malpractice claims
An outside creditor cannot get to the FLLC interest owned by the client. Based in what
are called the "charging order" protections, the FLLC acts as a shield against outside
lawsuits or other creditor claims facing a manager or member. In this way, clients can
protect any personal or family assets from all types of lawsuits -- including professional
malpractice, business-related claims, slip and falls, and even those resulting from car
accidents � simply by using an FLLC to own their wealth, as opposed to owning it in
their own name.

FLLC AS INCOME TAX SAVER
The FLLC can save a client income taxes by having an income-producing
asset owned by the FLLC when the FLLC interests are gifted to children or
other beneficiaries in lower income tax brackets. In this way, a client can
"use" their childrens' lower tax brackets to shelter income from rental real
estate, securities, and other passive income sources. Meanwhile, as the FLLC
manager, the client maintains 100% control of the asset.

FLLC AS ESTATE TAX-SAVER
Estate taxes are "death" taxes on everything you own when you die. After a
$1.5 million non-taxed amount, these taxes quickly hit a maximum rate of
45%. Nonetheless, you can use FLLCs to reduce such taxes � as the IRS
allows assets owed in properly-drafted FLLCs to be discounted for estate tax
valuation purposes.

PITFALLS
The most common pitfall in using an FLLC is not working with an asset protection
specialist. Like any sub-specialty, advisors who create and maintain these entities on a
daily basis are best to rely on � not general attorneys, estate planners, or financial
planners.

CONCLUSION
For its ability to protect a client's assets from internal claims and outside lawsuits,
because it can save both income and estate taxes, and because control remains with the
client, we use FLLCs in almost every client's financial or legal plan. It is certainly an
important tool to consider in your planning.