Frustrate creditors with the prospect of phantom income:

IRS Rev. Rul. 77-137. The IRS ruled that the "holder" of a charging order is liable for taxes on the income, even if he never receives a single distribution!

In reality few creditors ever obtain a charging order against a member. Not only will such efforts prove futile for collecting, but the creditor takes the risk of receiving a large tax liability without receiving a penny in distributions. Creditors negotiate more favorable settlements once they understand the hopeless of the situation.

When using a Nevada Investment Holding LLC to hold assets, the “phantom income” strategy is a very powerful asset protection tool. Many wealthy persons spend tens of thousands of dollars developing complex strategies to protect assets. For the average person with moderate assets this strategy is affordable and extremely effective.