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Playing the 'System'
MoneyNing acts surprised when he found out that "Steal-$50-Billion-From-Charity" Bernie Madoff's wife gets to keep her house:
"Out of all the coverage of the Bernard Madoff fraud, the one headline that really puzzled me was the point in time when they were negotiating a house that the lawyers claim belonged to Madoff’s wife. It would seem to me that every asset the family owns came from the ponzi scheme, especially since the coupled was married for more than 50 years. However, the court ruled that Ruth (the wife) can keep the house when his husband destroyed so many people’s homes.
How is that fair?"
Well, it's not fair ... but, it's the law and every person going into business SHOULD take advantage of the protection from liability (but, not criminal liability, as in Bernie's case ... I'm talking about commercial liability, when things simply go wrong in your business) that the law provides ... in fact, the laws in Australia - as an example - make it very simple:
1. Put ALL of your personal (non-business) assets into your wife’s name … in the event of a divorce it makes NO difference how your assets are structured.
2. Put ALL of your business (non-personal) assets into a company name (e.g. equivalent of an LLC, S-, or C-corp) … that’s all that you can lose if your business/investments go broke
3. Sign as many personal guarantees as you need to (in YOUR name only) because you should have a ZERO net worth … no need to declare bankruptcy because nobody will bother you when they find out that there’s nothing to get and you then make a ‘generous’ offer to pay, say, 10 cents in the dollar.
[AJC: It's true, I have a ZERO personal Net Worth ... actually, I've broken my own rule because the house is now 50% in my name ... not even sure why I did that ...]
Scummy, but it works ;)
"Out of all the coverage of the Bernard Madoff fraud, the one headline that really puzzled me was the point in time when they were negotiating a house that the lawyers claim belonged to Madoff’s wife. It would seem to me that every asset the family owns came from the ponzi scheme, especially since the coupled was married for more than 50 years. However, the court ruled that Ruth (the wife) can keep the house when his husband destroyed so many people’s homes.
How is that fair?"
Well, it's not fair ... but, it's the law and every person going into business SHOULD take advantage of the protection from liability (but, not criminal liability, as in Bernie's case ... I'm talking about commercial liability, when things simply go wrong in your business) that the law provides ... in fact, the laws in Australia - as an example - make it very simple:
1. Put ALL of your personal (non-business) assets into your wife’s name … in the event of a divorce it makes NO difference how your assets are structured.
2. Put ALL of your business (non-personal) assets into a company name (e.g. equivalent of an LLC, S-, or C-corp) … that’s all that you can lose if your business/investments go broke
3. Sign as many personal guarantees as you need to (in YOUR name only) because you should have a ZERO net worth … no need to declare bankruptcy because nobody will bother you when they find out that there’s nothing to get and you then make a ‘generous’ offer to pay, say, 10 cents in the dollar.
[AJC: It's true, I have a ZERO personal Net Worth ... actually, I've broken my own rule because the house is now 50% in my name ... not even sure why I did that ...]
Scummy, but it works ;)
Add a Comment
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Comment by Adrian on June 15, 2009 at 6:48pm - If you intend to get serious, I suggest that you invest an hour with an attorney and see what he recommends. But, I ALWAYS put each business/investment into a separate legal entity ... even my startups.
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Comment by Trey & Juliana on June 15, 2009 at 6:36pm - So are you saying ...put all your business assets into a corporation......Such as the truck we drive to the swap meet, our inventory and such and then pay ourselves a salary?
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