Caselaw Update:


Asset Protection just became a little harder. Limited liability companies (LLC) have been trumpeted as providing greater protections from creditors to owners of businesses than the protection provided by corporations. Although both corporations and LLC can provide the owners of the company protection in their personal assets from liability that occurs in the operation of their business, only LLC have provided protection of owners' ownership interests in the company from person liability problems of individual owners (avoiding disruption of business from creditors of an owner seizing an ownership interest in the company). In this sentinel case, the Supreme Court of Florida determined that a trial court could order a judgment debtor to pay over all his interest in an LLC to the judgment creditor when the judgment debtor was the only owner of the LLC. Considering that the vast majority of LLC are single owner LLC, what are the little guys to do to get the same protections that multiple owners LLC have? Find business partners? Add their spouses/significant others as owners? Olmstead v. FTC, Supreme Court Florida 2010

Caselaw Update:

Get it in writing. When the written real estate purchase contract required changes to the contract to be in writing, a verbal agreement to change part of the terms could not be enforceable.

In re A & M Florida Properties II, LLC (Bankruptcy S.D.N.Y. 2010)

Caselaw Update:

Is it time to use individual retirement annuities rather than IRA when beneficiaries have creditor problems? In this criticized court case, the Second District Court of Appeals for Florida found that a beneficiary who opted to transfer his father's IRA into an "inherited IRA," meaning the account goes out of the name of the decedent into the name of the decedent for the benefit of the beneficiary so that distributions can be spread over the beneficiary's life, would not be allowed protection from creditors provided by Florida Statutes section 222.21. Robertson v. Deeb, 16 So. 3d 936 (Fla. 2d DCA 2009)

Caselaw Update:

Assessment of taxes by the IRS may not be stopped by a statute of limitations (3 years) as would be the case in a normal income tax return filing if the filer files an erroneous tax return reporting no tax (i.e. is an invalid return) and the taxpayer formally rescinds the return. In re McKay (Mid. Dist. FL Bankruptcy 2010)