Is The LLC Business Structure The Most Underrated Estate Planning Tool?
The Internet is full of advice about how you should choose the limited liability company (LLC) business structure if you are about to establish a business. The authors of these advice articles seem to assume that you know next to nothing about business, and that your LLC will inevitably go bankrupt within five years. They also assume that your personal assets are of modest value and that, since your business venture is doomed from the start, your main goal is to protect your paltry personal assets from creditors when your LLC inevitably folds. When you read these articles, which seem to appear with surprising frequency, in infinite variations, you can’t help but chuckle the way you do when you see news headlines about how to make a good impression on a first date. The target audience of those articles is someone much younger than you. You have established an LLC and kept it afloat for years; now the question is how the LLC fits into your estate plan. To find out more about estate planning asset protection strategies, including those that have to do with LLCs, contact a Tampa estate planning lawyer.
You Can Keep Your LLC Out of Probate, but Only If You Do It Right
When you found an LLC, you must write an operating agreement for it. Business owners have great flexibility about the provisions they can include in their LLC operating agreements; this is one of the reasons that the LLC business structure is such a popular choice. One of the provisions you can include is whether the LLC is a probate asset or a non-probate asset. If you designate it as a non-probate asset, then it passes to your heirs the same way a trust does, without going through probate court. Most young people do not think about this when they set up an LLC, so if you do not remember what you wrote about inheritance in your LLC’s operating agreement, now is a good time to reread it.
Your LLC Can Buy a House for You to Live In, but Should It?
LLCs are a popular business structure for real estate investors; real estate agents, title companies, and other entities in the real estate industry are used to dealing with LLCs. It is possible for your LLC to buy a house for you to live in. At first, this sounds like an excellent asset protection strategy, since, if your LLC is a non-probate asset, so is its house. This strategy can backfire, though. Current laws require more scrutiny of real estate purchases by LLCs, because money launderers use this tactic at least as often as pennywise seniors do. It might mean that you have to go through even more scrutiny than you would if you bought the house yourself. The best way to keep a house out of probate is to add your children to the title while you are alive or to transfer it to a trust.
Contact David Toback About Passing Your Wise Business Decisions to the Next Generation
A Central Florida estate planning lawyer can help you make wise estate planning decisions about your LLC. Contact David Toback in Tampa, Florida to set up a consultation.
Source:
northwestregisteredagent.com/llc/buying-a-house#:~:text=Yes.,tax%20implications%20that%20can%20develop.
