Legal Question in Business Law in Nevada

forming a private Nevada C-corp for asset protection

I've read quite a bit about asset protection (from lawsuits, ex-spouses, etc.) by forming private Nevada C-corporation using a third party nominee. Is this legal? Is this the best way to protect your assets? Is this really how OJ still lives a millionaire lifestyle and never paid the Goldman's a cent?

I've also read that a Nevada LLC doesn't have to have the owners recorded if they aren't the ones actually managing the company. This seems like a safer bet, if it's true...but then with an LLC, isn't the tax liability on the owners SSN rather than a C-corp, which uses the corp's EIN.

It's all very confusing. I don't feel comfortable basically signing over everything I own to a stranger, but they say all ties between your SSN and the corp must not appear.

They said that attorneys determine if they'll take a case, often, based on the assets showing for the potential defendant, and that by having very few assets, it takes down the chances of being sued to begin with.

They also talk about doing an IBC in the Bahamas with a brokerage account in the Cayman Islands.

How can I protect my assets?

I'm definitely NOT looking to avoid paying taxes, so please don't think that's my angle.

Thank you so much for this service!!


Asked on 2/25/05, 12:17 pm

3 Answers from Attorneys
Louis Venezia Law Offices of Louis Venezia at Union Square, P.C.

Re: forming a private Nevada C-corp for asset protection

For as long as you remain in New York, your assets can be reached by anyone who obtains a judgment against you (except for the limited protections obtained through bankruptcy) even if you transfer your assets to a corporation. Legal theories such as "piercing the corporate veil", "alter ego" or "transfers lacking consideration" may be used to reach those assets. THE GOOD NEWS IS YOU CAN STILL PROTECT YOUR ASSETS. However, any approach to protecting your assets requires an analysis of your circumstances as well as your assets. Some of the elements that must be examined are: the nature of your employment or business, business entities through which you conduct business, current and available insurance policies, marital status, etc.

Lawyers who litigate and pursue the collection of judgments are in the best position to provide you with assistance. Without knowing the precise details of any particular person's circumstances (OJ, for example), you cannot make a judgment as to how they have protected their assets. In the case of OJ, the appellate court that reviewed his case specifically noted "He has pension funds worth $4.1 million that are exempt [under California law] from execution to pay this award. Despite the award of punitive damages Simpson can continue to enjoy a comfortable living."

Our office provides advice to clients in this area. Our billing rate is $350 per hour. If you wish to arrange for an appointment, please call us at 212-267-7000.

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Answered on 2/25/05, 1:45 pm
Paul Malikowski Malikowski Law Offices, Ltd.

Re: forming a private Nevada C-corp for asset protection

Nevada law provides for self-settled spendthrift trusts here: http://www.leg.state.nv.us/NRS/NRS-166.html

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Answered on 3/01/05, 2:05 am
Grenville Pridham Law Office of Grenville Pridham

Re: forming a private Nevada C-corp for asset protection

The Nevada C-corp is not the appropriate vehicle for asset protection. The Nevada self-settled spendthrift trust is what you are looking for. However, there is a two year period during which claims can be made against the trust and you have have to have a Nevadan act as trustee. You do not have total control over your self-settled spendthrift trust. Expect to pay at least $5,000 for such a trust and if you have less than a million dollars in assets, I don't know if it is really worth the expense and effort. Depending on your circumstances, good liability insurance may be your best option. You need to consult with an attorney and disclose all of your assets and all of your liabilities, realized or potential, to make any intelligent suggestions concerning your options.

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Answered on 3/03/05, 12:36 pm


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