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The IRA-Owned LLC

When: 2/9/2010 6:00 PM to 8:00 PM
Where: 333 City Blvd West, Orange, CA
Description: Held in the 1st floor conference room - attendance is limited so please R.S.V.P.!!

TAKE CONTROL AND PROTECT YOUR RETIREMENT:

INVEST YOUR IRA IN A LIMITED LIABILITY COMPANY

Retirement! What’s more sacred than your “nest egg”? Sadly, you may have already lost much of your nest egg to bad investments, failed pensions programs or the economy. As investors have become more disillusioned and frustrated with traditional investment choices, steep stock market decline, corporate scandals, and the ever looming threat of lawsuits, many investors are seeking way to take control of their retirement investments within an asset protection environment.

NEEDED ASSET PROTECTION

The average successful person is sued several times during his or her life. There are nearly one million lawyers in America and many of them earn a living by suing people. The only thing worse than not making any return on your IRA is losing it through a lawsuit. Many, like doctors and lawyers, are in high risk professions, but is anyone’s IRA safe from lawsuits? The US Supreme Court ruled that a court could decide how much of your IRA you get to keep in the event you lose a lawsuit. In California, a state statute says:

“an IRA is exempt only to the extent necessary to provide for the support of the judgment debtor and his dependents when the judgment debtor retires, taking into account all resources that are likely to be available at the time of retirement.”

With an IRA-Limited Liability Company (“LLC”) you can make instant investments and sleep comfortably at night knowing the IRA-LLC provides powerful asset protection for your retirement assets.

HOW AND WHY IT WORKS

The IRS rules allowing Self-Directed IRA’s to own LLC membership interest is the key that makes the IRA-LLC so powerful. First you move your existing IRA to a Self-Directed Custodian (one with no investments to sell you). Next we help the IRA Custodian organize a specially customized LLC. A LLC is a legal entity that has powers and protections that are not possessed by any individual or by any regular IRA. It is the combination of the self-directed IRA and a specially designed LLC that yields such beneficial results.

This is an entirely new type of LLC. It is started, created, and owned entirely by your IRA. It’s an LLC that is designed specifically for an IRA that respects IRS and Department of Labor codes governing IRAs. The legality of an IRA owning an LLC was affirmed in the case Swanson vs. The Commissioner in 1996. The lesson learned from Swanson was that the LLC must contain very specific language that meets all IRA and Department of Labor codes and requirements.

WHY AN LLC

A Limited Liability Company is a business entity that is a cross between a Corporation and a Partnership. Thus, an LLC provides the limited liability protection of a corporation, but with pass-though taxation.

ASSET PROTECTION OF AN LLC

In addition to offering control over a wide choice of investments, the IRA-LLC offers unparalleled asset protection from judgments and creditors. In addition to the tax benefits afforded by tax deferral IRA laws, the IRA assets are also protected by the strong LLC laws and statutes. For example, if someone were to win a lawsuit against you, they could not take away the assets inside the LLC (i.e., your retirement assets). What they would receive is a “charging order” against the LLC.

A charging order doesn’t give the individual rights over the LLC. At most they would be entitled to any distributions made out of the LLC, if any! It is strictly up to the LLC whether or not to make distributions. Let’s say the LLC made $50,000 in profits and you decided to keep it all in the LLC and reinvest it. In other words, no distributions were made. The individual holding the charging order (the judgment creditor) would owe the IRS tax on that profit! This is because an IRA-LLC is a “flow through” entity. The fact that no funds were distributed or reinvested within the LLC retirement plan makes no difference to the IRS. The person holding the charging order is now liable for the taxes each year. Who would want to pay taxes on profits that may not be distributed for years? Ask any attorney and they will tell you it is almost never worth suing an LLC. With an IRA-LLC you can have great protection against sue happy lawyers and their predatory clients.

INVEST IN WHAT YOU KNOW

Do you have an area of expertise? Is real estate your area of expertise? Perhaps someone is starting a new business and you want to get in on the ground level. You could make a loan to them or be a partner with your IRA-LLC. With the IRA-LLC you can invest in:

* ∙ all types of real estate (commercial, residential, bare land),
* ∙ real estate options,
* ∙ tax liens,
* ∙ mortgages and deeds of trust,
* ∙ businesses,
* ∙ all types of loans (including personal and hard money loans),
* ∙ stocks,
* ∙ bonds,
* ∙ CD’s,
* ∙ call and put options,
* ∙ foreign investments,
* ∙ joint ventures,
* ∙ LLP’s,
* ∙ trusts,
* ∙ partnerships,
* ∙ IPO’s corporations,
* ∙ bridge financing,
* ∙ plus many other investments.

PROTECT WHAT YOU’VE EARNED

Many investors have been told by their exiting IRA custodian/broker that they are limited to stocks, bonds, mutual funds and CD’s as IRA investments. The fact that you have a retirement account proves that you have worked hard and taken charge of your life. But 97% of all IRAs are in the control of custodians/brokers that decide for you what your IRA should invest in. Wow, you work your whole life to build up a nest egg and a stranger makes all your investment decisions. Perhaps it’s time to establish an IRA-LLC, protect your investment, and put your money in projects which you have knowledge and control.