“Hiding” assets legally

[Carlmichael]

Putting money in business accounts that belong to a LLC,S or C corp.
Would your position in the Corp or partnership mater as far as your ties to the money?

Is your liability determined simply by the transaction record showing you as an individual deposited xx amount of money and not your title?

If a client opens a business account and transfers substantial amounts of money from a personal account such as a brokerage account to the business account, will this be a problem when the client applies for educational financial aid or an state/federal service that requires said client to be below a net worth threshold?

[asragov]

I am not a lawyer, and am not trying to give legal advice, but one of the main issues in business vs. personal liability is determining if, in fact, the business is separate from a person.

If there is no “corporate veil” (that is, no corporate minutes, no real employees, no corporate taxes, etc.) then such structures could be considered a sham. If the company owes taxes to the IRS, for payroll, etc., those could possibly have the first claim on the money, so the fate of the money depends on a lot of factors.

Regarding college financial aid, it would be assumed that your transfer of money to a business results in a higher value of the stock of that business. So, all you did was shift assets from your own cash to your shareholdings – your net worth did not change.

If you shift them to someone else’s name and then shift them back, it could (rightly) be considered a sham transaction by the IRS, the other person could owe back taxes, lots of risks, etc.

Try to look at having the money to pay for college as a blessing!

In terms of asset protection, you might find these links useful (no affiliation):

http://www.assetprotectionbook.com/asset_protection.php

http://www.garrettpub.com/garrettpub/garrettpubbooks.cfm

Homepage

[asragov]

I am not a lawyer, and am not trying to give legal advice, but one of the main issues in business vs. personal liability is determining if, in fact, the business is separate from a person.

If there is no “corporate veil” (that is, no corporate minutes, no real employees, no corporate taxes, etc.) then such structures could be considered a sham. If the company owes taxes to the IRS, for payroll, etc., those could possibly have the first claim on the money, so the fate of the money depends on a lot of factors.

Regarding college financial aid, it would be assumed that your transfer of money to a business results in a higher value of the stock of that business. So, all you did was shift assets from your own cash to your shareholdings – your net worth did not change.

If you shift them to someone else’s name and then shift them back, it could (rightly) be considered a sham transaction by the IRS, the other person could owe back taxes, lots of risks, etc.

Try to look at having the money to pay for college as a blessing!

In terms of asset protection, you might find these links useful (no affiliation):

http://www.assetprotectionbook.com/asset_protection.php

http://www.garrettpub.com/garrettpub/garrettpubbooks.cfm

Homepage

[Carlmichael]

Great reply, I’m checking out the links right now. I might as well explain how I came to this subject matter. I grew up in Los Angeles poor. My mother was a business owner and did well for a single mother. My father left when I was a child and they divorced years later. After highschool I joined the U.S. Marines and had a successful tour while attending a local community college. I am now transferring to UC Berkeley. My mother died while I was in the service and I was the sole benefactor to a 100k life insurance policy. I’ve invested it well and have made an overall 178% percent return.

I don’t identify my self as a minority personally or on applications even though I am half latin american. Regardless if it is formally incorrect I identify with my self as white Anglo Saxon Protestant. No one helped me gain my knowledge in the financial sector or with my successful investments. I’ve always been hungry and have always had a plan yet I feel that I am being punished for my large brokerage holdings even though my veteran/very underprivileged background on its own would bring all sorts of preferential treatment in loans, educational programs, etc.. Which I would not exploit in any situation anyways.

[Carlmichael]

Great reply, I’m checking out the links right now. I might as well explain how I came to this subject matter. I grew up in Los Angeles poor. My mother was a business owner and did well for a single mother. My father left when I was a child and they divorced years later. After highschool I joined the U.S. Marines and had a successful tour while attending a local community college. I am now transferring to UC Berkeley. My mother died while I was in the service and I was the sole benefactor to a 100k life insurance policy. I’ve invested it well and have made an overall 178% percent return.

I don’t identify my self as a minority personally or on applications even though I am half latin american. Regardless if it is formally incorrect I identify with my self as white Anglo Saxon Protestant. No one helped me gain my knowledge in the financial sector or with my successful investments. I’ve always been hungry and have always had a plan yet I feel that I am being punished for my large brokerage holdings even though my veteran/very underprivileged background on its own would bring all sorts of preferential treatment in loans, educational programs, etc.. Which I would not exploit in any situation anyways.

[DCRogers]

As a former Berkeley grad, I congratulate you and wish you all the best! Your life story sounds like you will be a superb addition to their ranks.

As for hiding assets, my friend, I fear it is pay now, or pay (with your soul) later… think of it as an investment in yourself. You will not regret later on being able to think of yourself as an honorable person for paying your own way, by playing straight by the rules.

(That is, unless you’re applying to business school there… now, by the new rules, you must prove your worth by finding every shady and schemy hole you can! “Honor” is worth: negative squat. Sad to say it, but that’s the new world of the high executives, I believe… but this is just the view of a lowly scientist who once left a 60K ill-gotten check uncashed on the table, when I was unemployed… modern mileage certainly seems to vary!)

[DCRogers]

As a former Berkeley grad, I congratulate you and wish you all the best! Your life story sounds like you will be a superb addition to their ranks.

As for hiding assets, my friend, I fear it is pay now, or pay (with your soul) later… think of it as an investment in yourself. You will not regret later on being able to think of yourself as an honorable person for paying your own way, by playing straight by the rules.

(That is, unless you’re applying to business school there… now, by the new rules, you must prove your worth by finding every shady and schemy hole you can! “Honor” is worth: negative squat. Sad to say it, but that’s the new world of the high executives, I believe… but this is just the view of a lowly scientist who once left a 60K ill-gotten check uncashed on the table, when I was unemployed… modern mileage certainly seems to vary!)

[Carlmichael]

Thanks for the support.
I will be attending Haas School of Business. I value your point. Saving money or my personal moral values.

Maybe I’m too cynical, I feel as if it is all of our jobs to determine an organizations validity. How many degenerates does the average student personally know that abuses things such as FAFSA?. FAFSA gets exploited because its exploitable nothing should count on the assumed moral inclinations of individuals. It should be based on merit not need but, I simply do not “need” the aid by their definition.

60k is an impressive amount not to turn the other way for.

[Carlmichael]

Thanks for the support.
I will be attending Haas School of Business. I value your point. Saving money or my personal moral values.

Maybe I’m too cynical, I feel as if it is all of our jobs to determine an organizations validity. How many degenerates does the average student personally know that abuses things such as FAFSA?. FAFSA gets exploited because its exploitable nothing should count on the assumed moral inclinations of individuals. It should be based on merit not need but, I simply do not “need” the aid by their definition.

60k is an impressive amount not to turn the other way for.

[anxvariety]

America is a land of immigrants and opportunity, so how are you any different? If you have to do tricks, or start a company for the sole reason of deceiving the admissions process then I’d guess the program isn’t intended for you. If everyone did it, then the program would be broken. Who do you think would get the blame for that? If you use the program under deception, is that taking the opportunity away from someone who actually needs it?

More people than not have been poor.. more people than not have had struggles, and almost everyone here in America was once an immigrant. So I don’t see how you will be able to excuse yourself on any of those points should you ever feel guilty in the future. That said, I’m not the most virtuous person ever just tossing out a perspective. Not trying to judge you as a person, just challenging some of the reasons you mentioned.

I thought military would pay for school. I guess that’s just active duty? That sucks if not.. I think the military should be on the hook for active or not education valid through lifetime. Especially when considering that we have enough money bleeding to pay social security to illegal immigrants…

Best of luck on your degree!

[anxvariety]

America is a land of immigrants and opportunity, so how are you any different? If you have to do tricks, or start a company for the sole reason of deceiving the admissions process then I’d guess the program isn’t intended for you. If everyone did it, then the program would be broken. Who do you think would get the blame for that? If you use the program under deception, is that taking the opportunity away from someone who actually needs it?

More people than not have been poor.. more people than not have had struggles, and almost everyone here in America was once an immigrant. So I don’t see how you will be able to excuse yourself on any of those points should you ever feel guilty in the future. That said, I’m not the most virtuous person ever just tossing out a perspective. Not trying to judge you as a person, just challenging some of the reasons you mentioned.

I thought military would pay for school. I guess that’s just active duty? That sucks if not.. I think the military should be on the hook for active or not education valid through lifetime. Especially when considering that we have enough money bleeding to pay social security to illegal immigrants…

Best of luck on your degree!

[Carlmichael]

I pasted my response about FAFSA from a reply I made on another forum to a user that brought it up. I’m not talking about tuition assistance or admissions I can get into any school regardless of my financial status and I don’t plan to apply for TA as I know I don’t qualify.

Unfortunately I’ve been denied for scholarships where I was the most qualified canidate but didn’t demonstrate enough financial need. I was told by the voting members on the committee that I blew everyone out of the water. I’m not complaining, I understand the point, if I don’t need it I don’t need it .

Additionally I’d like to protect my assets in general as I have no need for the securities and funds to be liquid and I invest aggressively.

The military provides me with the MGIB since I served as active duty for 4 years.

http://www.gibill.va.gov/GI_Bill_Info/rates/CH30/ch30rates100106.htm
A standardized monthly amount that lasts 3 years.

[Carlmichael]

I pasted my response about FAFSA from a reply I made on another forum to a user that brought it up. I’m not talking about tuition assistance or admissions I can get into any school regardless of my financial status and I don’t plan to apply for TA as I know I don’t qualify.

Unfortunately I’ve been denied for scholarships where I was the most qualified canidate but didn’t demonstrate enough financial need. I was told by the voting members on the committee that I blew everyone out of the water. I’m not complaining, I understand the point, if I don’t need it I don’t need it .

Additionally I’d like to protect my assets in general as I have no need for the securities and funds to be liquid and I invest aggressively.

The military provides me with the MGIB since I served as active duty for 4 years.

http://www.gibill.va.gov/GI_Bill_Info/rates/CH30/ch30rates100106.htm
A standardized monthly amount that lasts 3 years.

[DCRogers]

I apologize for being so glib about my business rant… been stung by too many overpaid and underperforming executives who knew all the rules and none of the reasons. Your profession can be as noble as any. (If we scientists had more POWER, dare to say you’d be speaking more ill of US!)

The 60K was an insurance check, but it was issued on a lie that a family member told about how the house was damaged… so I could not cash it. Pretty clean-cut choice, really, other than the amount! *Sob*

You’ve really got your first business case-study on your hands… when does working within the bounds of what is allowed become unfairly manipulating the system? The fact that you are thinking about it so much already places you in the top quarter, as far as I can tell.

Good luck!

[DCRogers]

I apologize for being so glib about my business rant… been stung by too many overpaid and underperforming executives who knew all the rules and none of the reasons. Your profession can be as noble as any. (If we scientists had more POWER, dare to say you’d be speaking more ill of US!)

The 60K was an insurance check, but it was issued on a lie that a family member told about how the house was damaged… so I could not cash it. Pretty clean-cut choice, really, other than the amount! *Sob*

You’ve really got your first business case-study on your hands… when does working within the bounds of what is allowed become unfairly manipulating the system? The fact that you are thinking about it so much already places you in the top quarter, as far as I can tell.

Good luck!

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