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Arizona Asset Protection Information PageWhy Arizona?David Tanzer's law firm concentrates in asset protection planning for domestic and international clients. We are often asked, “Why use Arizona to register Family Limited Partnerships (FLPs) and Limited Liability Companies (LLCs)?” says David Tanzer of the Law Firm of David A. Tanzer & Associates, PC.There is a two-part answer to the question: First, Arizona offers the advantage of a statutory remedy of Charging Order Protection for FLPs and LLCs not available in most other jurisdictions. Typically, a creditor applies to the court to force a distribution of assets from within the entity to put money into the hands of the owners to satisfy a money judgment. What that means is that entities of all types have limited asset protection benefits from an owner’s perspective. Instead, Charging Order Protection is a legislative statutory remedy available in Arizona, which generally prohibits a court from forcing the distribution of assets from within an FLP or LLC. Only if and when a distribution is made to the owners, can a creditor attach the FLP or LLC assets. If the assets remain within the FLP or LLC, they can remain protected from the owner’s creditors. This added protection offers huge benefits to the owners for legitimate asset protection by keeping entity assets from the hands of creditors. Worse yet for creditors, they will pay income taxes on phantom income from the FLP or LLC, even though they never receive any distribution of assets from the entity. All of this adds up to an excellent opportunity to bring about early settlements on legitimate claims from the very beginning, and at a significantly lower cost. In addition, it helps avoid frivolous lawsuits altogether. The second part of the answer is a word of caution. Simply setting up an FLP or LLC in a jurisdiction such as Arizona is really only the first step. Importantly, the Partnership Agreement for the FLP and the Operating Agreement for the LLC must be established to provide the best opportunity for Charging Order Protection. Improperly drafted documents, or documents not drafted to offer the best advantages, may not result in achieving the benefits offered by the legislative statutory provisions. In addition, at all times, certain formalities must be met on an ongoing basis. However, if you do things right, an Arizona FLP or LLC is an excellent first step towards protecting your assets. Beyond Charging Order Protection, there are other excellent domestic and international asset protection planning opportunities available. More information about domestic and international asset protection planning and the Law Firm of David A. Tanzer & Associates, PC can be found at www.DavidTanzer.com If you like the above article please contact David directly for your asset protection needs. We are not lawyers. We are happy to do filing in all 50 States for your incorporation needs, but don't expect us to give legal advice in complicated matters about specific legal situations, possible multistate structures, trusts, etc. We recommend you to use lawyer for tax and asset protection structures. Feel free to read our Nevada asset protection book. Our office is located at 5348 Vegas Dr., Las Vegas, NV 89108. About us.
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