is an LLC the best way to hide income??

31 Replies

I have an Ex wife who will be taking me to court in the near future, I am trying to structure my business entities for that. Any good ideas?

Hi, no one wants to stay away from an X more than I do and I understand you guys wanting not to pay alimony, especially if she is shacked up, but really! If it's child sipport, take responsibility!
There is no legal way to hide money, not with an business entity, not with any off shore account, no trust, there is just no way to hide it legally! Don't believe me? It's called money laundering, tax evasion and perjury when the question asked in court is "How much do you make?" Simple, own up to it. If you don't want to pay anything for five years don't make anything! If you owe it you will pay it eventually, so get it over with and pay her off. See if you can get a lump sum payment to get her off your back. There are ticked off father/husband sites to address marital problems. Good luck, Bill

Well straight and to the point. I like that!! Maybe I'm not being more detailed. I pay childsupport. "I render unto ceasar what is cesar's" I just have been told that using business structures allows you to have more write offs. The little that I have done with LLC's, I have come to believe that. All im trying to do here is learn from more seasoned individuals. We spoke a lil about this last night. I dont want anyone to know what I own. I have been told that is possible. I want to know how to legally accopmlish that so that I can focus 100% on aquiring property.

Hi, yes I understand and I'm glad to hear you are willing to pay Cesar, but what you are not getting is that when you go to court, and you might go back several times in the future, her attorney only has to ask you what you make and you need to tell the truth. Because after he asks that, he can have the court pull your tax returns, bank records, real estate deeds, contracts, notes, etc. At that point if you lied in the first place, the judge will be gunning for you too.
The type of business you have has nothing to do with writing off expenses, unless you want to have a C corporation and be tax twice....
You can have a strategy of saying making capital improvements to your properties, spend money to put a nicer roof on, landscape that MH park, repave the road, etc. this will reduce you income. If you don't want people to know what properties you have, I wouldn't post them on the internet! I have knew a guy that put all of his assets in his family's name and worked for them for an hourly wage and was just plain poor. He had a contract to purchase properties but was not in title and did not receive the income, which was held in a trust by his parents for him later on. So, he skated by, but then again, he really couln't finance a kool aid stand either. The othger school of thought might be to go forward and make as much money as you can, child support is usually set by statute and alimony, if any, can only go up so much if your income is made after the divorce. So, if you make a million, so what, you can afford the better attorney and just pay her off and move on. Maybe there are others here who will chime in on your plight...those are basically my suggestions. Good Luck, Bill

I really appreciate your input. I like the idea of my family having everything... I'm gonna look into it. And by the way there is no way to proove that I own that trailer park.

Can't run from the ex. I'm living proof. LLC's were of no help to me-subjected to full forensic accounting and tons of legal bills. Judge looked at me and said "ma'm, you married him - if he made a lot less than you that's your problem. If you bought properties and he didn't contribute or help that's your problem. you acquired it during marriage and in this State its 50/50."

Originally posted by Matt Salazar:
I have an Ex wife who will be taking me to court in the near future, I am trying to structure my business entities for that. Any good ideas?

Try and "stay away from Court".

Work something "out of Court" with the ex-wife. If she will not work directly with you, try to find someone else that she may work with in your behalf.

Otherwise. Good luck!

P.S. If you decide to "stuff your mattress", pleeeeeeze do not post it here (your "ex" may be reading this forum too?) Just kidding! LOL!

Bob Dobbs
Land Rescue League LLC

Matt, I am afraid the other posters are wrong on some counts. It is true that you should not lie under oath. But there are ways to tell the truth and show that you do not have much assets or income, depending on what you wish to accomplish.

Exactly what is it that you wish to accomplish, though? Are you trying to prove that your assets are not worth much for the purpose of an asset division? Or are you trying to prove that your income is not much, for the purpose of spousal support or child support? In addition, what is your primary asset or source of income? These are important questions in planning your strategy and I am afraid you will have to shell out some money to find a good lawyer who specializes in this stuff in order to discuss the details of your situation and the most appropriate course of action. Sometimes, the most appropriate course of action would be to do nothing, while in other instances it could be to do something fairly complex. It is hard to provide this type of consulting service in a forum because it does take a fairly in-depth analysis of your situation to suggest solutions.

I would have to agree with Vikram. Without knowing the answers to several questions it would be hard to prove good advice. Talking about this on an open forum probably is not a good idea either.

If you haven't already, I would suggest getting a good attorney. You may need to consult with several because you have several issues to address.

This is why you get a pre nup seriously.

Also you might want to check out an asset protection lawyer some specialize in asset protection relating to divorce.

Once answrs are posted to Vikrams questions, we can be better informed to assist you.

One thing that has eluded all so far is that an LLC is a "pass-through" entity and as such, gives you no tax benefits at all. (aqt least not the LLC itself)

However, as a RE investor with an entity (LLC, S-corp, or other) you can deduct business expenses such as auto, office, travel, depreciation, ammortization, etc and reduce your taxable income, but in divorce court, count on the opposing attorney to argue to add back in any paper losses.

Best advice is to settle out of court. The only winners in court are the lawyers!

I just want to clarify that I do not want Matt to answer the questions that I had asked. I merely meant to show that those factors play a role in the final solution for him. He should discuss it privately with his advisors and not here in the forum.

I really appreciate the input guys. I have settled outside of court but I would like to prepare for the future just in case she decides to come after me again.

If you can just settle up and give her what the court decides. After the divorce there is no law preventing you from starting another company and working out of that entity. Dangerous decision to post this on the internet though, I hope this feed gets cancelled and no one gets subpoenaed.

First of all Matt. For the love of god, why do people think the internet is anonymous anymore? This isn't 1995. The internet is quite the opposite these days. Basically everything on the net is trackable if someone cares enough.

You don't have to be a "super l33t hacker" or anything like that. Honestly all most internet detective work takes common sense.

You know what I would do if I was a lawyer and got your case? The FIRST thing I would do? I would google your name, city, state.

Guess what happens when you google "Matt Salazar San Angelo tx"? Just click the link below...

Oh, and while I'm at it, hello Matt's ex's attorney. I know you are reading this.

Next time use a throwaway account...

wow thats crazy!!! I had no idea? Makes sense tho.... haha. Too bad I dont own anything

Well now you know :-)

also, check out Kind of scary what you can pull up on people. I don't have much of a history yet though so good luck finding anything interesting about me lol :-)

I've heard the adage: own nothing, control everything

Though in practice, I've only met one person who managed it. Many years ago I worked in a law firm whose client did that. He was of middle eastern persuasion and had divorced his wife 20 years earlier, but they still shared the house - he had one wing, she had the other. She and their children (all adults) owned all the property he had acquired over 40 years of investing and to all intents and purposes he was judgment proof. BUT he managed all of it. It was used for security for loans and I don't know what else.

Short of being in a culture that allowed that I don't know how one would. Do you trust anyone enough to title all your property in their name but have control of it?

I suppose if you look at Donald Trump, probably most of his property is in LLCs, LLPs, Corporations and who knows what else.

I suppose that it helps to have assets. (The gentleman above went from $200. to $200M in about 25 years.)

Originally posted by Matt Salazar:
I really appreciate the input guys. I have settled outside of court but I would like to prepare for the future just in case she decides to come after me again.

Matt, Thats awesome that you were able to settle it out of court and i understand that you want to protect yourself for later down the road in the case of and event. I was just recently talking with a very smart business friend about asset protection. An LLC. can own and LLC. which can own a trust that also owns a trust may it be an offshore accout etc.. Do some research this is an example of what he has done with his company and is not in any way legal advise from me. There are many ways to structure a company to protect assets my best advise that i can give you is to talk with an asset protection manager and attourneys. Best of luck.

Originally posted by Mary Cronin:
He was of middle eastern persuasion

I didn't know you could persuade someone to be Middle-Eastern. :D

But the rest of what you say makes sense - between closely held corporations with differntial voting right and irrevocable trusts, you can get a lot done.

There are many ways to protect your assets legally. With various entities, both domestic and offshore as well as trusts, you can create a veil of privacy that is legal, but still untouchable.

On a very basic level, you can put all of your assets in various LLC's that are owned by an offshore trust.

If you are sued, you must disclose your income to the courts, but that doesn't mean the assets can be attached.

I recommend to all clients with a reasonable net worth to establish and offshore entity (like and LLC or IBC) and a bank account. This at least gives you options to move money around if necessary.

And yes, it is perfectly legal.

thanks for sharing that info...i'd love for you to go into more detail or perhaps start a new thread on this subject...would you be willing??


Originally posted by Bryan Alenky:
thanks for sharing that info...i'd love for you to go into more detail or perhaps start a new thread on this subject...would you be willing??

The methods are as limited as your creativity. With various trusts, LLC's, LP's, offshore entities, insurance policies, etc. the options are endless.

For example, you could place each of your RE holdings in its own separate LLC. The form another LLC to take out a lien against each property, thus stripping all equity. Each LLC could then be owned by a hybrid asset protection trust with your living trust as your beneficiary.

Maybe if you had a specific question I could answer that.

yes, i have a many different checkbooks would that require?? lol


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