The Limited Liability Company as an Estate Planning Tool

Posted on: February 23rd, 2018

Look around and you’ll likely notice LLC after LLC in your community. Why? Because the limited liability company (LLC) is a popular entity in the estate planning and business worlds.  

In the estate planning world, LLCs are commonly used in high net worth families to:

  • Pass family business assets to the next generation at a discounted value, thus reducing transfer taxes, while maintaining management control in the parental generation.

  • Provide organization and consolidation of assets.

  • Provide management and control succession in case of disability or retirement.

  • Prevent family assets from being lost in divorce.

  • Isolate liability stemming from the business so personal assets can’t be seized - and vice versa - isolate liability stemming from a personal matter from affecting business assets.

The limited liability company is also commonly used in the business world to create asset protection. For example, a real estate investor would own an apartment building in an LLC, not her individual name. This keeps any liability arising from within the LLC such as a tenant claim from affecting personal assets - and vice versa.

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