Alaska LLC & The Charging Order Protection

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Seven Year Old Shelf Corporation For $1295-1595

ALASKA LLC PRESENTATION

The Alaska LLC offers the ultimate LLC option:

1.  The creditor must work and pay to win the lawsuit.

2.  If the creditor wins litigation, he’s left with the effort of collecting the judgment.

3.  The creditor can only obtain a charging order against your interest in the LLC.  This means that the creditor is “next in line” for any LLC distributions that were due you.

4.  The manager of the LLC decides that he won’t release any distributions from the LLC.

5.  This causes the creditor to be liable for all taxes as if he’s collected from your interest in the LLC–but he doesn’t get a penny.  In other words, he must pay taxes as if he’s been collecting without receiving a dime.

6.  The creditor realizes that he can’t force distributions to be released.  He can’t foreclose against your LLC interest.

Review:

Creditor can’t collect, can’t force collection, must pay taxes as if he collected and he has no other remedy to obtain the money due him.

Impact:

Creditor realizes that the effort to collect the judgment is futile.

Disclosure:

You must disclose your interest in the LLC on your income tax return.

Privacy:

On public record, you’re not disclosed as the manager.

On your income tax return you ARE disclosed as one of the owners.

  • This information is typically revealed during discovery.  The other side will know of your interest in the LLC.  However, grabbing your interest in the LLC is a difficult task for the creditor.