Asset Protection

In an ever-increasing litigation world, it is vital for individuals to understand exposure to lawsuits and creditor claims. We assist clients in recognizing particular creditor exposure through a detailed analysis of a client's holdings to determine exposure from business and personal liabilities. Sharpe & Associates and Sharpe Blumoff can advise clients in multiple areas to reduce or eliminate such exposure, including:

• Family Limited Partnerships (FLP)
• Limited Liability Companies (LLC)
• Asset Protection Trusts (APT) - A foreign or domestic self-settled asset protection trust or, "self-settled trust" is a trust created for one's own benefit, typically for the purposes of estate tax reduction or creditor protection.
• Spousal Asset Allocation - Reallocating the ownership of particular assets between spouses can reduce the exposure of those assets to creditors of one or both spouses.
• Investment Instruments - Working with clients and their advisors to determine the applicability of life insurance, annuities, retirement accounts, and other financial instruments as asset protection options.
• Premarital Agreements - An agreement in contemplation of marriage designed to dictate the rights of one or both spouses in property owned by the parties upon divorce and/or death.

Family Limited Partnerships and Limited Liability Companies

The Family Limited Partnership (FLP) and the Limited Liability Company (LLC) are two of the primary asset protection tools used in Texas. Structuring an FLP or LLC requires careful planning and sensitivity due to the changes in federal and Texas case law. We understand and appreciate how structuring FLP and LLC ownership, management, and funding can determine whether a client is able to achieve the desired benefits. We work with the family, the family office, and other client advisors, including investment brokers, financial advisors, insurance agents, and CPAs to properly structure the FLP or LLC according to the client's particular needs.

Using a collaborative team approach, our attorneys model a variety of scenarios to arrive at an optimal structure.

Our clients often implement FLPs and LLCs to -

• Maintain control of family assets
• Facilitate annual giving without fractionalizing family assets
• Shift income to lower tax bracket
• Avoid probate (in Texas and other states)
• Consolidate investments for efficiency
• Keep assets in the family
• Create additional hurdles to creditors
• Centralize management of family assets
• Provide management structure for disability
• Protect family assets against failed marriages
• Avoid state inheritance taxes in ancillary states
• Promote knowledge of and communication about family assets

Entity Formation and Business Planning

Whether starting a new business or formalizing an existing venture, it is crucial to do so under the asset protected veil of an entity. Failure to not only conduct business under the protection of an entity, but also to follow the entity's specific formalities can expose the business owners, investors, lenders, and managers to the business liabilities. There are a number of considerations that must be examined when determining which structure is right for each client. Sharpe & Associates and Sharpe Blumoff advise clients in not only establishing the entities listed below, but also in helping our clients properly maintain the business through conducting annual meetings and drafting contracts, promissory notes, resolutions, buy-sell agreements, minutes and various other business documents:

• Limited Partnership (LP)
• Limited Liability Company (LLC)
• Series Limited Liability Company (SLLC)
• S Corporation
• C Corporation
• Professional Association (PA)
• Professional Limited Liability Company (PLLC)
• Non-Profit Corporation / 501(c)3
• Private Foundation