Justia Badge
The Florida Bar - Board Certified
Miami Lakes - Bar Association
Avvo Rating 10.0
Weston Bar Association
Avvo Clients Choice 2016
DC Bar
Indiana State Bar Association
Ullinois State Bar Association
The Virginia Bar Association

Articles Posted in Corporate

By Phillip B. Rarick, Esq.,  Miami Lakes and Weston Estate Planning Attorney

Within the past week, the Florida Department of State began sending notices by email to all persons with interests in Florida corporate entities, such as LLC’s, corporations, and limited partnerships.  These reports are due May 1, 2019 and there is no waiver of the $400 late fee if you miss this deadline.

The official Florida web site  at www.sunbiz.org has “Consumer Notices”  to alert you to bogus web sites that try to scam persons who file these reports.

May the odds be with you –but frankly they’re not.    More than 60% of doctors over the age of 55 have been sued at least once, according to a new survey by the American Medical Association (AMA).  Doctors are not the only professionals at risk. Virtually all small business owners and professionals face multiple risks from the person injured at a party on  one of your properties, the “friend” who borrows your jet ski and hits a swimmer,  dissatisfied customers, disgruntled employees, and unhappy ex-partners.

It is a simple reality: We live in a hostile legal environment, and the chance you will not face costly litigation at some point in your career is not good. The good news is that you can fight back.  Here is a quick summary of our “Porcupine” Asset Protection Strategy with tested legal strategies that can help protect your investments and property.

  1. Make Your Assets As Unattractive as Possible to Attack with a Good Asset Protection Strategy

By Phillip B. Rarick, Miami Lakes and Weston Estate Planning Attorney

Note: This 10 Point Checklist is for those persons who have interests in one or more Florida entities, such as a corporation,  limited liability company (LLC),  or  limited Partnership (LP).

1.     Annual Fees.   In January the State of Florida will send notices via email reminding you that annual fees for each corporate entity are due no later than May 1.   Do not wait to get an email notice from the state, as your fees are due regardless of whether you get a notice.   Remember:   The deadline to pay these fees is May 1 without penalty.

Big Question: Can your practice survive if you suddenly die or become incapacitated? 

Royal-Flush-florida-professional-association-post-300x215Recently, a highly respected physician suddenly died owning 100% of his practice in a Professional Association. No other person was listed on Florida’s Sunbiz.org as an officer.  Payroll was paid on a weekly basis.   Even though the Professional Association had been assigned to the doctor’s living trust, the bank (a large Florida bank) refused to give the successor trustee access to the Professional Association’s bank accounts citing F.S. 621.06, 621.09 and 621.11.

The statutes cited limit ownership of  a  P.A.  to a licensed professional.   We contend the Bank’s interpretation is overly narrow because no court has held that transfer of any interest to a living revocable trust is a transfer of beneficial interest. A living revocable trust is essentially the settlor.   Although we believe the bank’s interpretation of these statutes is wrong it is not worth fighting the bank.  The bank holds all the valuable cards:  the King, the Ace and of course all the money.

By Phillip B. Rarick, Miami Trust Attorney

Although the main focus of our Florida Counsel Services is probate, trust,  and corporate law,  we can assist your office if you need deeds to a trust or other entity.

If you wish to use our deed services, click FLORIDA DEED INTAKE FORM.  Please complete this form with all relevant information and email it to cmedina@raricklaw.com.

By Phil Rarick, Esq.

Here is a simple fact:  most small businesses cannot afford or even survive a major dispute between partners if the dispute ends up in court.   Such disputes can doom the small business due to interruption of the company business, distract the principal partners from focusing on growth, and soak up all capital needed to sustain the company.

The following are 5 Take Away Points for avoiding court intervention in your business:

By Phillip B. Rarick, Esq.*

Action Item Done
1.      No weak links.  Each physician in group has personal creditor protection plan.  The goal is to have no exposed assets for plaintiff malpractice attorney to attack forcing plaintiff to settle within insurance policy limits.   See points 2-5 below.
2.      Each physician has domestic or off-shore asset protection trust to protect non-qualified equities and other liquid investments.  If domestic trust, consider top tier state jurisdiction such as Nevada.  If off-shore, consider clean jurisdiction with sophisticated, modern laws designed to provide maximum protection against creditor attack, such as Nevis or the Cook Islands. Note: Consider multiple layers, such as Nevis LLC owned by Cook Island Trust.
3.      Each physician has Delaware LLC or other entity to protect wages.  A Florida wage account is limited to 6 months and therefore often not the best solution.
4.      Each physician has homestead fully protected.   If homestead in municipality exceeds ½ acres it is not protected by Florida homestead law.  Consider deeding exposed property to corporate entity with 99 year lease to preserve homestead tax benefits.  If homestead is not in municipality then 160 acres are protected.   Consider leaving mortgage on property – even if not necessary – as good asset protection option.  The mortgage can be paid down to avoid creditor attack.
5.      Confirm investment rental properties and non-homestead real estate are protected by having title in multi-member LLC with operating agreement updated to take advantage of new Florida LLC law.  Note: Do not have LLC without asset protection Operating Agreement drafted by an attorney who concentrates in corporate or asset protection law.
6.      Office Space:  If group practice owns condo office space or other real estate this property should likely be owned by a separate LLC or LP and leased back to the Group.   Exposed real estate is low hanging fruit for creditors.  Remember if the practice is to be judgment proof there should be no exposed assets.
7.      Confirm IRA’s, pensions and similar plans are properly managed.   Private pension plans must strictly follow complex regulations.  You likely need a CPA or investment advisor experienced in pension plan administration.  See Item #21.
8.      Have a Plan B in event of death, disability or disagreement with partners.  This requires a Shareholder Agreement or you may find you have your partner’s spouse as a partner.  Do you have a shareholder agreement?  Is it up to date? Is it adequately funded with life insurance?    Mark Done only if you can answer yes to all questions.9.      Conduct annual independent review of patient charts and billing, coding, and collection processes to insure compliance with Medicare/Medicaid/private insurance carriers
10.  Conduct annual review of group corporate records to make sure basic corporate formalities are followed so that corporate veil cannot be pierced using alter ago theory.  If  professional association check if:   (a) annual corporate minutes up to date;  (b) separate corporate bank account; (c) stock certificates clearly show each partner’s interest;  (d) tax records sync with corporate record.
11.  Make sure individual medical malpractice policy and possible corporate malpractice policy in place.   Conduct annual review of policy limits with medical malpractice broker who specializes in med-mal insurance.
12.  Individual checking account you use for monthly expenses:  If married, title as Tenants by Entirety (TBE); if single consider placing title in Delaware LLC.
13.  Umbrella policy.   This is a good, cost effective insurance product but make sure you check for gaps in policy.   All insurance policies have limits and exceptions; make sure the “Umbrella Policy” does not contain gaps.
14.  Insurance coverage to avoid business interruption or threats to profitability of practice: (a) Disability insurance;  (b) Overhead insurance to cover practice expenses during period of disability;  (c) Workers compensation insurance;  (d) general liability insurance to cover slip and falls in office or parking lot; (e) adequate auto insurance.
15.  Theft proof practice monies and accounts receivable.  Have strict system for logging in all checks in master log and ensure properly deposited.  No one person should control check logging system.  In larger practices, have someone from CPA firm periodically review check logging system without notice.
16.  Ensure trust systems in place for children and loved ones.  Note:  Make sure your estate plan is integrated with your asset protection plan.
17.  Protect vacation home:  Consider to title in LLC, Limited Partnership, or Tenancy by Entireties.
18.  Auto and motor vehicles: If married, title in name of person who drives vehicle the most; not in joint name.  Make sure all vehicles are adequately insured.
19.  Boats or jet skis: Title in name of LLC with asset protection operating agreement.
20.  Schedule target completion date for your asset protection plan.  Write the date down on your office and smart phone calendars.   Plan when the waters are quiet – prior to any lawsuit. Waiting too long may limit planning options and enable attack via the Florida Uniform Fraudulent Transfer Act, F.S. 726.
21.  The most important item: Have team of experienced, caring  professional advisors consisting of: (a) CPA; (b) estate and asset protection attorney; (c) qualified financial and  pension plan advisor; (d) medical malpractice insurance broker; and (e) general liability insurance advisor.

Note:  We welcome your questions.  Contact Phil Rarick, Miami asset protection attorney, Rarick & Beskin, P.A.,  at  (305) 556-5209 or prarick@raricklaw.com.

*    With special thanks for ideas from Alan Gassman, Esq., estate & asset protection

planning attorney, guru, and friend.  Alan is the author of Creditor Protection For Florida Physicians, an excellent and insightful book for physicians, attorneys, and CPA’s; it is available on Amazon.com.

Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced Miami asset protection attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.

By Phillip B. Rarick, Esq.*

Action Item Done
1.      No weak links.  Each physician in group has personal creditor protection plan.  The goal is to have no exposed assets for plaintiff malpractice attorney to attack forcing plaintiff to settle within insurance policy limits.   See points 2-5 below.
2.      Each physician has domestic or off-shore asset protection trust to protect non-qualified equities and other liquid investments.  If domestic trust, consider top tier state jurisdiction such as Nevada.  If off-shore, consider clean jurisdiction with sophisticated, modern laws designed to provide maximum protection against creditor attack, such as Nevis or the Cook Islands. Note: Consider multiple layers, such as Nevis LLC owned by Cook Island Trust.
3.      Each physician has Delaware LLC or other entity to protect wages.  A Florida wage account is limited to 6 months and therefore often not the best solution.
4.      Each physician has homestead fully protected.   If homestead in municipality exceeds ½ acres it is not protected by Florida homestead law.  Consider deeding exposed property to corporate entity with 99 year lease to preserve homestead tax benefits.  If homestead is not in municipality then 160 acres are protected.   Consider leaving mortgage on property – even if not necessary – as good asset protection option.  The mortgage can be paid down to avoid creditor attack.
5.      Confirm investment rental properties and non-homestead real estate are protected by having title in multi-member LLC with operating agreement updated to take advantage of new Florida LLC law.  Note: Do not have LLC without asset protection Operating Agreement drafted by an attorney who concentrates in corporate or asset protection law.
6.      Office Space:  If group practice owns condo office space or other real estate this property should likely be owned by a separate LLC or LP and leased back to the Group.   Exposed real estate is low hanging fruit for creditors.  Remember if the practice is to be judgment proof there should be no exposed assets.
7.      Confirm IRA’s, pensions and similar plans are properly managed.   Private pension plans must strictly follow complex regulations.  You likely need a CPA or investment advisor experienced in pension plan administration.  See Item #21.
8.      Have a Plan B in event of death, disability or disagreement with partners.  This requires a Shareholder Agreement or you may find you have your partner’s spouse as a partner.  Do you have a shareholder agreement?  Is it up to date? Is it adequately funded with life insurance?    Mark Done only if you can answer yes to all questions.9.      Conduct annual independent review of patient charts and billing, coding, and collection processes to insure compliance with Medicare/Medicaid/private insurance carriers
10.  Conduct annual review of group corporate records to make sure basic corporate formalities are followed so that corporate veil cannot be pierced using alter ago theory.  If  professional association check if:   (a) annual corporate minutes up to date;  (b) separate corporate bank account; (c) stock certificates clearly show each partner’s interest;  (d) tax records sync with corporate record.
11.  Make sure individual medical malpractice policy and possible corporate malpractice policy in place.   Conduct annual review of policy limits with medical malpractice broker who specializes in med-mal insurance.
12.  Individual checking account you use for monthly expenses:  If married, title as Tenants by Entirety (TBE); if single consider placing title in Delaware LLC.
13.  Umbrella policy.   This is a good, cost effective insurance product but make sure you check for gaps in policy.   All insurance policies have limits and exceptions; make sure the “Umbrella Policy” does not contain gaps.
14.  Insurance coverage to avoid business interruption or threats to profitability of practice: (a) Disability insurance;  (b) Overhead insurance to cover practice expenses during period of disability;  (c) Workers compensation insurance;  (d) general liability insurance to cover slip and falls in office or parking lot; (e) adequate auto insurance.
15.  Theft proof practice monies and accounts receivable.  Have strict system for logging in all checks in master log and ensure properly deposited.  No one person should control check logging system.  In larger practices, have someone from CPA firm periodically review check logging system without notice.
16.  Ensure trust systems in place for children and loved ones.  Note:  Make sure your estate plan is integrated with your asset protection plan.
17.  Protect vacation home:  Consider to title in LLC, Limited Partnership, or Tenancy by Entireties.
18.  Auto and motor vehicles: If married, title in name of person who drives vehicle the most; not in joint name.  Make sure all vehicles are adequately insured.
19.  Boats or jet skis: Title in name of LLC with asset protection operating agreement.
20.  Schedule target completion date for your asset protection plan.  Write the date down on your office and smart phone calendars.   Plan when the waters are quiet – prior to any lawsuit. Waiting too long may limit planning options and enable attack via the Florida Uniform Fraudulent Transfer Act, F.S. 726.
21.  The most important item: Have team of experienced, caring  professional advisors consisting of: (a) CPA; (b) estate and asset protection attorney; (c) qualified financial and  pension plan advisor; (d) medical malpractice insurance broker; and (e) general liability insurance advisor.

Note:  We welcome your questions.  Contact Phil Rarick, Miami asset protection attorney, Rarick & Beskin, P.A.,  at  (305) 556-5209 or prarick@raricklaw.com.

*    With special thanks for ideas from Alan Gassman, Esq., estate & asset protection

planning attorney, guru, and friend.  Alan is the author of Creditor Protection For Florida Physicians, an excellent and insightful book for physicians, attorneys, and CPA’s; it is available on Amazon.com.

Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced Miami asset protection attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.

Contact Information