Our Strategies

Asset protection planning involves structuring ownership of your assets so that a creditor cannot easily attach them. By making your assets more difficult to reach and by reducing the amount of property showing on public records, you’ll be in a much better position to negotiate and settle future claims. Asset protection planning is not intended to defraud creditors, hide assets or evade taxes. Rather, it enables you to focus your energy on building wealth without worrying about losing it.

Corporate Research LLC has spent years developing and refining its strategies based on input from some of the finest lawyers, accountants and planning professionals in the country. Our hands-on experience in structuring entities and crafting solutions for difficult problems and unusual situations qualifies us to address your particular circumstances. The following summaries of some of our strategies are provided as general overviews only:

Professionally Managed Nevis Limited Liability Companies

Limited liability companies that are formed in Nevis, a British Independent Territory in the Caribbean ("Nevis LLCs”), have become preferred vehicles to protect a wide variety of assets, including investment accounts, real estate, interests in other entities, capital equipment and intellectual property. Although it is considered to be a sophisticated strategy, you can implement a Nevis LLC quickly and inexpensively.

Your Nevis LLC can own one or more U.S. entities that hold and operate the assets you contribute to your Nevis LLC. Your Nevis LLC would elect/appoint you to management of the U.S. entities. This enables you to keep your assets in the U.S. and fully control their management, investment and use.

Your Nevis LLC has a U.S.-based manager as well as a foreign-based manager and makes distributions only with the approval of both managers. You are a member (owner) of the Nevis LLC, and it has at least one other member, typically a member of your family. In order to lessen the possibility that U.S. courts will have jurisdiction to issue orders that compel the members of the Nevis LLC to take particular actions, which would weaken the asset protection benefits of the strategy, at least one member of the Nevis LLC other than you should not be involved in the activities that expose you to potential liabilities or claims.

Since you don’t own the U.S. entities (your Nevis LLC owns them), judgments against you personally shouldn’t affect the assets or ownership of the U.S. entities. In any event, if a claim arises, the U.S. entities may transfer the assets to the owner of the U.S. entities, which is the Nevis LLC. Under Nevis law, your creditors can’t reach your Nevis LLC’s assets, and they can’t attach or foreclose on your Nevis LLC membership interest to satisfy a claim.

Foreign-Domiciled Family Limited Liability Companies (FLLCs)

The Nevis LLC described above is a smart alternative for a family limited partnership or certain trust arrangements. In addition to offering the same valuation discounts and estate and gift tax benefits as a family limited partnership, the FLLC provides effective asset management and asset protection. The FLLC also may keep its members’ spouses and other relatives from making claims against the FLLC’s assets or otherwise interfering in the FLLC’s business.

Special Note About Fraudulent Transfers and Fraudulent Conveyances

Under the Federal Bankruptcy Code and state laws such as the Uniform Fraudulent Transfer Act (UFTA) and the older Uniform Fraudulent Conveyance Act (UFCA), a court may void a transfer of assets that is intended to hinder, delay or defraud creditors. If a transfer is voided, the court may allow a creditor to attempt to seize the assets or may award the creditor damages equal to the value of the assets transferred. You must consider this issue in connection with selecting an asset protection planning strategy.

Corporate Research LLC primarily focuses its planning work on the Nevis LLC strategy because it is clearly considered to be a “transfer for equivalent value,” which will not be set aside as a fraudulent transfer unless a creditor proves by a preponderance of the evidence that the transfer was “actually intended” to hinder, delay or defraud the creditor. The Bankruptcy Code and the UFTA provide us with a list of “badges of fraud” that helps us avoid circumstances that may lead a court to conclude that this “actual intention” was present at the time of the asset transfers. For example, we routinely recommend that clients implement their asset protection plan as long as possible before incurring substantial obligations. We also recommend that clients transfer only some and not all of their assets and that they do so in an open manner using normal deeds, bills of sale, and assignments. Asset protection planning that also offers the opportunity to obtain estate and gift tax benefits and access to investments outside of the U.S. that are not otherwise available to you can be helpful to avoid characterization of planning as fraudulent transfers or fraudulent conveyances.

Strategies such as asset protection trusts, gifts to spouses or other family members and many other asset protection strategies other than the Nevis LLC strategy involve transferring assets in exchange for something that has less than “reasonably equivalent value” to the assets transferred. Under the Bankruptcy Code and the UFTA, these transfers are voidable by a creditor, whether or not the transferor intended to hinder, delay or defraud the creditor, if the transferor either (a) was insolvent or became insolvent as a result of the transfer, (b) retained unreasonably small capital after the transfer, or (c) made the transfer knowing that he would incur debts beyond his ability to repay them. These circumstances, which are considered to be “constructive fraud,” are much easier for a creditor to establish than the actual intention that must be proven in order for a creditor to set aside a transfer for equivalent value such as a transfer to a Nevis LLC.

A fraudulent transfer action under the Bankruptcy Code must be brought within one year of the filing of a bankruptcy petition. However, a bankruptcy trustee also has the status of a hypothetical creditor and may use state statutes with longer limitation periods to sue and set aside a transaction. In many states, where there is actual intent, the action must be brought within the latter of 4 years after the fraudulent transfer or one year after the transfer could have reasonably been discovered. If there is constructive fraud, the action must be brought within 4 years of the transfer.