business structure

IRA assets are protected at the state level. ERISA qualified retirements plans, like OJs, carry federal protection and are virtually immune from creditors, but many of these protection rules do not apply in bankruptcy or claims initiated by the IRS.

Be aware that there is case law where a member’s interest in an LLC were transferred to a creditor instead of limiting the creditor to the charging order. There is case law for both single member and multi-member LLCs. The LLC operating agreement can be written to avoid these situations. It’s just another thing to consider when drafting the OA.

As far as multiple LLCs go, they do not protect any equity in the property of the LLC and they create a bunch of management headaches. Equity stripping protects equity in the property and needs only 2 entities. Keep in mind the more convoluted the set up, the more likely a judge or jury is going to think you are doing something shady. Every decision should have a valid business reason, other than making it more difficult for creditors to collect. Frandulent transfer laws can apply and undo much of the work.

To clarify, I think Marc was referring to OJ Simpson taking his $3M NFL pension to Florida with him, free and clear, even though there were huge $10M? civil judgements from families of people who’s been killed.