Many people don’t realize it, but so much of your financial accomplishments are built upon proper entity structuring. Although many people are familiar with entity structuring in the sense of owning a business, it’s crucial for investors and those who are holding assets as well. In fact, almost everyone could benefit from proper entity structuring.

Appropriate structuring is literally the foundation of any sound financial strategy. It’s the necessary framework to help manage your cash flow and to allow you to keep more money in your pocket so that you can control it and continue to accumulate wealth.

Both Sides of the Coin

Entity structuring can become very complex, and unfortunately, most approach entity structuring from either the tax side or the asset protection side. However, to be most beneficial to you, proper entity structuring should provide asset protection as well as tax mitigation.

With the advice of a CPA alone, the recommendation to the client may be to forego structuring. This recommendation, solely from a tax perspective, may make sense. However, from an asset protection standpoint, the CPA’s recommendation leaves the client vulnerable to liability. On the other hand, some entity structuring strategies provide excellent asset protection while absolutely ignoring the tax situation of the client. Either scenario can be financially catastrophic to the client.

Art, not a science

Many have heard presentations on the subject of asset protection, yet they leave confused. Much of the time, conflicting information is being delivered. The reason for most of the confusion is that the entities used in an asset protection strategy were originally formed for a different purpose.

For instance, the LLC was born to create ease of use for business owners because they are theoretically less cumbersome to operate than a corporation. They were designed to provide the liability protection found in a corporation coupled with the ease of taxation of a partnership. It was simply a byproduct that the LLC emerged as a commonly used asset protection tool, namely because of the charging order protection.

Further, many who present entity structuring for asset protection are in the business of creating entities. Consequently, there are often recommendations that each asset reside in its own LLC. If you are a real estate or other type of investor, the idea of having one LLC per property or asset could be overwhelming from both a cost and administrative perspective.

The Ark and Entity Structuring

We like to approach entity structuring from the perspective that it cannot become so expensive or burdensome that it detracts from you doing what it is you should be doing—focusing on your business and accumulating wealth. Therefore, we tailor fit your entity structures to your unique situation. We often use a sleek, equity stripping structure, to keep costs and administrative issues to a minimum, while at the same time providing you with excellent asset protection. We also make sure that the entities maximize your tax efficiency, so that once again you can keep the most of your hard-earned money. After all, the more you have to work with, the better chance your have of reaching your financial objectives.

Please know that any endeavor to provide proper entity structuring for your business, your investments, or any other valuable asset, will require some time and dedication on your part. If you are not familiar with entities and have not operated one in the past, implementing the proper structures will take work. Fortunately, The Ark offers comprehensive support for clients via an online knowledge base, individual case support and group Q&A teleconference calls and online meetings.

The investment will be worth it. You will rest easy knowing you have protected your assets and have separated yourself personally from your business. You will have provided an excellent foundation for your tax planning and will have gained better control over your cash flow, giving yourself the edge you need to accumulate more wealth.

To get started with your custom entity structuring recommendation, please complete the online form or contact our office at 1-877-511-3152.