Lee Phillips

What You Missed

Make Money Using the Law – Accumulation and Preservation of Wealth

Lee Phillips

Mr. Lee Philips, a local attorney specializes in helping investors like us protect ourselves from those who would take what they have not earned. Tuesday night he gave a dynamic performance at the May General Meeting. “What is the possibility of you being sued?” “Twenty years ago your chance was 25% but now has now dramatically increased to 85%.” Lee stressed that you need to protect yourself.

Paying too much in income and estate taxes is epidemic, so Lee pointed out that everything must be written down in specific wording for you to be totally protected, saving you money in taxes and fees, and passing on your money to your heirs, easily and safely.

“The legal system is set up to take everything you have not protected” was the expression Lee used repeatedly.

“What kind of liabilities do you have?” asked Lee. The obvious one was lawsuits, such as from tenants, suppliers, burglars, etc., but some not so obvious were medical bills, which can easily exceed your assets in a life threatening situation. Another is a death in the family tying up lots of assets while the attorneys take their portion, the courts and states theirs, and you can get what’s left, if any, at some date in the future. A divorce causes chaos with everyone, but can wipe out years of work in a few swipes of the pen.

One other situation, not usually thought of is the Internal Revenue Service. If you fail to pay all your business taxes, your business assets may be seized, your business bank accounts wiped out, and then the IRS will begin on your personal assets, ie. Personal bank accounts and assets. Entire families have been wiped out for business errors, causing turmoil and hardships.

Lawsuits and probate are expensive, time consuming, and public; Trusts are private, inexpensive, and allow you to transfer assets immediately.

“You must move your assets behind a shield” professes Lee, stating that he has been in the position of losing everything due to a debilitating medical emergency when he was 27. Lee started out as a patent attorney, but after his illness decided that he would rather help people protect themselves, and began his career of educating others.

“There are five main forms of protection in the law: General Partnerships, Limited Partnerships, Corporations and LLC’s,, Health Reimbursement Agreements, and Trusts ”.

General Partnerships make up 60% of the business entities in the US and afford the least protection. One partner can create liabilities for the other without permission or knowledge, causing hardships on both sides.

The Limited Partnership allows the amount of liability to be limited to the amount invested. A special legal entity can be created called a Family Limited Partnership, which allows the shifting of income to each family member thereby spreading the income out and reducing the taxes due, and keeping more of your own money.

Corporations and LLC’s afford the most protection for business entities, but there are many things that have to be accounted for in order to maintain that protection. There are 16 things you have to do in order to make sure your company is in legal compliance and if they are not done, the corporate veil can be pierced, and your personal assets can be open to liability. Lee’s course gives you the instructions and paperwork to accomplish these protections.

Health Savings Agreements (HSA’s) are a way to shield assets from taxes, but are sold by insurance companies. Health Reimbursement Agreements (HRA’s) are self directed and allow you to control the plan. This then makes your health related expenses “Tax Free” not just tax deductible. The protected savings are also judgment-proof.

There are many types of trusts, but some offer less protection than others. During probate, some will remain under the probate, and certain others avoid probate altogether. Structure is everything and the paperwork must be correct to be considered legally binding. Land Trusts afford privacy, but do not act as asset protection, but Revocable Living Trusts do offer that protection.

Lee also explained that identity theft was a multi-billion dollar industry and your costs of defending can run into the thousands of dollars. Revocable Living Trusts give you protection against this also.

In his program, Lee provides all the above forms and instructions, and includes many others. He offers wills, living wills, a durable power of attorney, independent contractor forms, etc. Everything you need to protect your assets from lawsuits, predators, and prying eyes. His presentation provided insights into the everyday hazards of our litigious society.