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Do I need a lawyer or an accountant?

Discussion in 'Other Off Topic Forum' started by noahlh, Jan 6, 2004.

  1. noahlh

    noahlh Formula 3

    Aug 28, 2003
    2,225
    NYC, NY
    Full Name:
    Noah
    I've always been a very hands-on person with most financial and legal stuff (both personally and for the comapnies I run) -- I manage my own books, do my own taxes, incorporate my own businesses, do my own payroll, etc. It's all generally been straightforward stuff (personal taxes, S-corporation / LLC filings, etc.). I've never used an outside accountant, and my legal questions have been limited to "pure" legal stuff (contracts, liability issues, etc.)

    But I'm about to start a new business where the structure/financial side of things is going to be significantly more complicated -- multiple company entities will be needed, strong asset-protection mechanisms must be put in place (i.e. I need to put 3rd-party liens on high-value company-owned assets to protect them in case of a big judgement against the company / bankruptcy, etc.)

    I'm fairly sure I have a grasp on everything, but I want an expert to double-check my work.

    My question is: For the stuff I mentioned above (liens, entities, etc.), do I want to speak to an accountant or a lawyer? My family's lawyer doesn't do this sort of thing and the accountant is just a 1040-pusher and gets scared every time I mention something "complicated" to him.

    So who am I looking for?

    Thanks all...

    nlh
     
  2. Texas Forever

    Texas Forever Three Time F1 World Champ
    Rossa Subscribed

    Apr 28, 2003
    38,914
    Texas!
    NLH, congratulations of your success so far, but the short answer to your question is that "Yes" you need to find a trusted financial advisor who specializes in planning. My guess is that you will need both a lawyer and a CPA.

    The problem is going to be that the really good ones are not cheap. Most of my fellow travelers, for example, would want at least a $10K retainer before taking the engagement. Speaking bluntly, most hands on types like yourself choke when you hear these kind of numbers.

    Is it worth it? Well, somehow us planner types stay in bidness, so clearly somebody thinks that it is worth it.

    Let me put it another way. One sign of success in America today is getting sued. As one lawyer put it to me, only a fool sues a loser. You may not like it, but this is the sandbox that we all play in today.

    Given this, what is worth to you for a asset protection plan to help you hang on to what you achieve? Once you get sued, having a plan in place is priceless.

    The problem is that you must put the plan in place BEFORE the Ka-Ka hits the fan. This means that you have to lay out the big bucks on the front end, which is hard to do.

    But, you are on the right track. It sounds like your current lawyer and accountant are what we call "Mechanics." They are very competent in what they do, but they like to color within the lines.

    What you need is a planner. You need a legal advisor to structure the asset protection moat around your wealth. You may also need a CPA type to help with the IRS and to provide some street smarts on what works and what doesn't. One word of caution. Beware of any CPA or finanical advisor who offers to do legal work. While it is true that many of us bean counters can run circles around the lawyers, we don't have the license on the wall. You gotta stick to what you know best.

    How do you find a planner? Everybody I know works 100% on referrals because the referral network keeps everybody from wasting time. So ask around. You can go with one of the big name firms if you like, but your best bet willl be to find someone locally who has the expertise and experience that you desire. There is a lot of talent out there, but you may have to interview several people before you find someone that clicks.

    Good luck and let us know how your venture turns out, DrTax
     
  3. racedecknc

    racedecknc Karting

    Nov 24, 2003
    198
    Winston Salem
    Full Name:
    Ed
    Well, I've been down this road before, and I wish I would have taken the path that DrTax just laid out for you.

    I cannot say enough good things about having a good CPA in your corner. I don't know if you'll need to spend $10k in your case (I could be wrong) since you're so hands-on.

    Ask other business owners in your industry for recommendations on both lawyers and accountants. If you already have all your statements handy and you're a hands-on guy, and you just need direction that you can complete yourself, it probably won't cost you a small fortune, but if you have any doubt that you can't keep up with it all, spend the money and hand it to someone that knows what they're doing.

    I would spend the money on the accountant first, I have usually found that it is money better spent, and they will tell you when you need to get an attorney involved.

    No matter what you do, don't procrastinate on this one, it *will* bite you.

    Ed
     
  4. noahlh

    noahlh Formula 3

    Aug 28, 2003
    2,225
    NYC, NY
    Full Name:
    Noah
    Terrific guys -- thanks very much for the input (that's why I posted here -- I knew I'd get some very wise advice!)

    I had a hunch the answer was going to be something like "yes" ...

    I'll start a search for a smart local CPA and speak with the attorneys I've been working with to see if they have any good suggestions on that front.

    Thanks again...
     

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