I am a trader who trades his own account. Things are good now, but not always. I declared bankruptcy two years ago. Can I establish some kind of trust or an LLC so I can esablish credit to purchase a house or a car under that entity's name.
Trusts or LLCs, and preferably a combination of trusts and one or more LLCs may (that's may) provide some measure (never complete) protection of assets. Presumably you are concerned about leverage for your trading activities. You will have to be careful what you report for margin, loan and other lines used in your activities (if you do), to avoid misrepresenting what you really own if you engage in asset protection.
Are you worried about liability if your trades go bad? Are you worried about simply insulating some of your trading profits so they won't be jeapardized? Are you worried about other risks (suits from an auto accident?). You have to identify more specifically your concerns (and goals) to properly plan. You also must recognize as the preceding paragraph pointed out, that no planning is 100%. You cannot transfer all of your assets to trusts and LLCs and expect it to be respected. You must have real business purpose for the entities and follow the formalities of those entities. Its not simple or inexpensive (if someone tells you it is, go elsewhere).
Now, you've indicated you wanted an LLC to own your house. Why? If an LLC owns your house you may have a bear of a time getting a mortgage (ask the banks). Further, you will probably jeapardize all of the favorable income tax benefits of home ownership (mortgage interest deduction, home sale exclusion, etc.). This really needs to be looked into if you will have a one member LLC (only yourself) as such an entity is disregarded for income tax purposes. You really need to verify with a tax accountant if the fact that the LLC is disregarded you will still qualify for favorable home income tax benefits.
It sounds as if you want asset protection. But what benefit is it to having a home you live in owned by an LLC? What is the business purpose? You may in fact undermine the entire structure and make it easy for a claimant (and the IRS) to pierce through the entities and reach your assets. Have your advisers look at the case law on this point. You probably won't want to do this.
Different types of trusts can own a home and still not destroy the favorable income tax benefits. Revocable living trusts are commonly used, but this won't provide any meaningful asset protection benefits. A qualified personal residence trust (QPRT) could be used, but there are costs, formalities and significant restrictions to this.
Finally, any transfers will have to past muster under the new tougher bankruptcy laws. You (and your advisers!) will have to be very careful to avoid having any transfers you make deemed to be for the purpose of defrauding, hindering or delaying your creditors.
Try reading 6 Hour Guide to Asset Protection Planning (published by John Wiley & Sons), author Shenkman. You can get it through www.amazon.com. That will give you some good background so you can proceed to the steps below.
What you seem to be indicating as your goals might be reasonable, although they clearly have to be better defined. But, you cannot do this stuff on your own any more than you can perform your own brain surgery. Get a good estate planner, corporate attorney and CPA for starters. Have a meeting with them all and determine the "big picture" of the planning that is appropriate for you. If the cost of this type of meeting is a concern, then scale your plans back and meet with a good estate planner and see what is practical. There might be simpler and cheaper first steps to acheive some of your goals.
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