Wednesday, September 3, 2014
A family limited liability company (LLC) is an effective estate-planning tool to transfer and/or hold assets for future generations.
An LLC is a business entity created by statute, and unlike a corporation, it shields owners form business liabilities. One of the main reasons people use family LLCs is to keep family assets intact and under control by a limited number of persons. You are in control as LLC manager while you are alive, and you choose individuals to be the successor managers.
With a family LLC, you do not have to wait until death or incapacity to transfer an interest to your loved ones. You can gift an interest in the LLC during your life without renouncing control. This is much different than gifting an interest in real estate. With an interest in real estate, all owners have a say and must sign off on selling it and any one owner could force the sale of the real estate.
See Mattew M. Wallace, Planning with Family LLCs, The Times Herald, Sept. 2, 2014.