News

 The Cal State Companies:  Center for Real Estate Studies ¨ Cal State Properties ¨ Cal State Investment LTD Partnership

PO Box 96 ¨ Palos Verdes, CA 90274 ¨ Phone 800-955-3135¨ ¨ E-Mail CalStatecompanie@aol.com

 

 

Media Contact: The Center for RE Studies                 For: Immediate Release

 

 

 

How to Make Yourself Judgment Proof

 

 

The primary goal of a little-known entity, The Family Limited Partnership (FLP), is to make yourself judgment proof against frivolous lawsuits while allowing you to utilize your assets to their fullest extent.

 

Hampering Creditors

 

The creation of the (FLP) protects you from judgment creditors, as  assignees of the debtor’s interest,  they cannot vote to direct the activities of the partnership. Without this ability, they cannot disburse partnership assets to satisfy their claims. The key to hampering creditor’s action is the vote!

 

Judgment creditors can attach a limited partner’s interest in the partnership and receive any disbursement made to that particular limited partner. However, if the partners decide not to make any disbursements, creditors receive absolutely nothing.

 

The partnership may make loans to individual limited partners without making distributions or withdrawals. These loans are very difficult to attach. The partnership may decide to pay wages to the limited partner. If judgment creditors attach the limited partner’s wages, there are severe limitations on the amounts they can take.

 

Eliminating or Reducing the Cost of Personal Liability Insurance

 

By properly protecting your assets from creditor’s claims, you can effectively reduce the cost of personal liability insurance.  You can reduce expenses for personal liability insurance substantially or eliminate them entirely when your assets are adequately protected.

 

Stumbling Blocks of Creditors

 

The net effect of having your assets protected is to eliminate or reduce your exposure. This is a valuable bargaining chip if you do decide to negotiate claims.

 

A creditor attempting to go after a limited partner is in a dilemma. The creditor will have to decide whether to expend additional time and money overcoming many formidable obstacles:

 

More often than not, the creditor ends up with a charging order against the interest of the limited partner that can generally be discharged or settled for an inconsequential sum.

 

The charging order entitles the creditor to income or assets only when they are distributed. Even if income is not distributed out of the partnership, the creditor is still taxed on it because the creditor is named on the K-1 (partnership tax return). Since the creditor cannot force the distribution of assets or income, the creditor may suffer paying taxes on his or her share of partnership income that has not been received.

 

Negotiating a Settlement

 

Once the creditors understand their position, they will probably want to settle their claims as soon as possible. Your goal is to wait. If you decide to settle, use the strategies in my Stop Lawsuits Cold CD/ Workbook  to learn how to settle for pennies on the dollar.

 

  Family Limited Partnership vs. Other Entities

 

The most significant advantage an FLP has over a revocable living trust and other entities is that assets are protected from creditor claims. This is not the case in a revocable living trust. Anyone with a legal claim can effectively satisfy that claim by penetrating the revocable trust and removing its assets. In an FLP, this cannot be done because you control the vote. In addition to asset protection, the FLP can be used as part of your estate plan to avoid probate and estate taxes in the same manner as a revocable living trust.

 

Other entitles, such as corporations and trusts are costly and time consuming. A wrong move can expose your estate to the whims of creditors. Professional fees could add up to more than the value of the assets. Putting aside all these headaches, these other entities still do not come close to offering the protection of a family limited partnership.

 

ABOUT THE AUTHOR: Eugene E. Vollucci,  is considered to be one of the foremost authorities on real estate taxation and apartment investing and has authored four books in these fields. He is the Director of the Center for Real Estate Studies, a real estate research organization. To purchase the  Stop Lawsuits Cold  CD/ Workbook and to learn more about the Center for Real Estate Studies, please visit our web site at  # http://www.calstatecompanies.com

 

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Cal State Companies Real Estate Investment Guide: #How to Gain Freedom from Lawsuits

Cal State Companies Real Estate Investment Guide: #How to Gain Freedom from Lawsuits

#How to Gain Freedom from Lawsuits

              News

 The Cal State Companies:  Center for Real Estate Studies ¨ Cal State Properties ¨ Cal State Investment LTD Partnership

PO Box 96 ¨ Palos Verdes, CA 90274 ¨ Phone 800-955-3135¨ ¨ E-Mail CalStatecompanie@aol.com

 

 

Media Contact: The Center for RE Studies                 For: Immediate Release

 

#How to Gain Freedom from Lawsuits

 

 

PAINTING A TRUE PICTURE OF LITIGATION

 

In my attorney’s office hangs a picture depicting a farm scene entitled “Litigation.” In the middle of the picture is a drawing of a cow. At one end of the cow is a very angry man gripping the cow’s horns and trying to pull the cow toward him. His caption reads, “The Plaintiff.” At the other end is another very angry man tugging on the cow’s tail trying to move the cow in his direction. His caption reads, “The Defendant.” In the middle, sitting on a stool, is a well-dressed man with a big smile on his face, milking the cow. His caption reads, “The Attorney.” And so it goes!

 

There are two unique aspects of the U.S. system that are alleged to encourage frivolous lawsuits and out-of-court settlements. First is the contingency fee arrangement with attorneys. This is when attorneys are compensated only if they win. In other words, a person can sue without having to pay any attorney fees up front. Defendants, of course, have no such privilege.

 

Then there is the “one-way” fee system, which means the plaintiff collects costs and fees from the defendant if the plaintiff wins. A successful defendant receives nothing. Defending a case can cost thousands of dollars. Regardless of its merits, defendants will usually end up making a business decision and will settle the suit out of court.

 

A movement requiring disputing parties to arbitrate their disputes is winding its way through the legal system. I hope it takes hold and is soon adopted by the entire legal profession. Arbitration generally costs less, is quicker, and it is not as likely to cause the major disturbances brought by lengthy court trials. An experienced judge hears the facts and, based on a legal interpretation of the law, makes a decision. The judge doesn’t get involved emotionally, and the decision is based on the judge’s comprehensive knowledge of the law. Because arbitration tends to reduce attorney fees, the movement is slow in coming. In the interim, you must take measures to protect yourself and your assets.

 

PROTECT YOURSELF

 

Your best safeguard is to have no attachable assets. This can be accomplished by creating an estate plan that transfers all your assets into a family-limited partnership. It is best to make the transfer before the threat of a lawsuit and/or actual judgment is rendered against you.

 

Unfortunately, litigation has become a way of life in this country. Both time and money are lost because of this national pastime. There are over 16 million lawsuits filed each year in this country. More than 70 percent of the attorneys in the world live in the United States. You have a greater chance to face a lawsuit in the country than anywhere else does. Keep mind this could happen to you! To protect yourself, my CD/workbook Stop Lawsuits Cold, will give you the resources you need to Gain Freedom from Lawsuits.

 

ABOUT THE AUTHOR: Eugene E. Vollucci,  is considered to be one of the foremost authorities on real estate taxation and investing and has authored four book in  these fields. He is the Director of The Center for Real Estate Studies, a real estate research association. To purchase the  #Stop Lawsuits Cold  CD/ Workbook and to learn more about the Center for Real Estate Studies, please visit our web site at   http://www.calstatecompanies.com

 

 

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              News

 The Cal State Companies:  Center for Real Estate Studies ¨ Cal State Properties ¨ Cal State Investment LTD Partnership

PO Box 96 ¨ Palos Verdes, CA 90274 ¨ Phone 800-955-3135¨ ¨ E-Mail CalStatecompanie@aol.com

 

 

Media Contact: The Center for RE Studies                 For: Immediate Release

 

#How to Gain Freedom from Lawsuits

 

 

PAINTING A TRUE PICTURE OF LITIGATION

 

In my attorney’s office hangs a picture depicting a farm scene entitled “Litigation.” In the middle of the picture is a drawing of a cow. At one end of the cow is a very angry man gripping the cow’s horns and trying to pull the cow toward him. His caption reads, “The Plaintiff.” At the other end is another very angry man tugging on the cow’s tail trying to move the cow in his direction. His caption reads, “The Defendant.” In the middle, sitting on a stool, is a well-dressed man with a big smile on his face, milking the cow. His caption reads, “The Attorney.” And so it goes!

 

There are two unique aspects of the U.S. system that are alleged to encourage frivolous lawsuits and out-of-court settlements. First is the contingency fee arrangement with attorneys. This is when attorneys are compensated only if they win. In other words, a person can sue without having to pay any attorney fees up front. Defendants, of course, have no such privilege.

 

Then there is the “one-way” fee system, which means the plaintiff collects costs and fees from the defendant if the plaintiff wins. A successful defendant receives nothing. Defending a case can cost thousands of dollars. Regardless of its merits, defendants will usually end up making a business decision and will settle the suit out of court.

 

A movement requiring disputing parties to arbitrate their disputes is winding its way through the legal system. I hope it takes hold and is soon adopted by the entire legal profession. Arbitration generally costs less, is quicker, and it is not as likely to cause the major disturbances brought by lengthy court trials. An experienced judge hears the facts and, based on a legal interpretation of the law, makes a decision. The judge doesn’t get involved emotionally, and the decision is based on the judge’s comprehensive knowledge of the law. Because arbitration tends to reduce attorney fees, the movement is slow in coming. In the interim, you must take measures to protect yourself and your assets.

 

PROTECT YOURSELF

 

Your best safeguard is to have no attachable assets. This can be accomplished by creating an estate plan that transfers all your assets into a family-limited partnership. It is best to make the transfer before the threat of a lawsuit and/or actual judgment is rendered against you.

 

Unfortunately, litigation has become a way of life in this country. Both time and money are lost because of this national pastime. There are over 16 million lawsuits filed each year in this country. More than 70 percent of the attorneys in the world live in the United States. You have a greater chance to face a lawsuit in the country than anywhere else does. Keep mind this could happen to you! To protect yourself, my CD/workbook Stop Lawsuits Cold, will give you the resources you need to Gain Freedom from Lawsuits.

 

ABOUT THE AUTHOR: Eugene E. Vollucci,  is considered to be one of the foremost authorities on real estate taxation and investing and has authored four book in  these fields. He is the Director of The Center for Real Estate Studies, a real estate research association. To purchase the  #Stop Lawsuits Cold  CD/ Workbook and to learn more about the Center for Real Estate Studies, please visit our web site at   http://www.calstatecompanies.com

 

 

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