Explaining The Value Of Family LLCs With Our Bethesda Estate Lawyers Part 1

The phrase “limited liability company” or LLC is very common in the business world. LLCs are normally explained as a hybrid between a corporation and a partnership, where every individual involved has the power to manage the entity as they see fit. While this structure is helpful for a wide range of businesses, it can also be applied to individuals who are hoping to provide the most for their families. A family LLC may be a valuable tool to help you transfer assets to your children and their children without the concern of future taxes being placed on your beneficiaries after you pass on. One way to ensure a quality outcome for this pursuit is to seek professional help from your local estate planning attorneys. These experts specialize in estate law, possessing the skills and tools needed to create an effective and reliable plan for your future and beyond.

JDKatz is here to serve as your team of trusted estate lawyers in Maryland and DC, delivering comprehensive assistance for a wide range of client needs, from tax fraud problems to criminal litigation and more. We rely on a diverse team to deliver balanced solutions for individuals in need of help with their wills and estates. Today, we’ll look into what a family LLC is and how it can benefit you. If you’re looking for expert assistance in planning for your future, be sure to contact us today!

What is an LLC?

Traditionally, an LLC is a business entity that affords owners the same benefits as other corporations. Limited liability companies are ideal for small businesses where the owner is at risk for being liable for lawsuits, insurance claims, collection of company debts, and so on. If you were to start your own enterprise and not protect yourself from these risks, creditors may be able to take your car, personal finances, and even home to pay for the debts. Ultimately, you want to take the best steps to protect yourself and your loved ones.

LLCs are useful because they are recognized, legal documents in every state. As a so-called hybrid, LLC members face weaker regulations from the state and federal laws. It’s important to remember, though, that LLCs function more like partnerships during tax time, as you will be claiming profits and losses on your own tax return.

How Does an LLC Help with My Estate Planning?

When it comes to strict regulations and taxation for your estate, an LLC may prove to be a smart choice. You can establish a limited liability company with your kids to effectively distribute an inheritance during your lifetime to help your children financially while reducing their overall tax liabilities on the assets transferred. You will still have control over the money in your LLC, but you can manage the funds without as much concern over gift taxes or estate taxes.

The Structure of Your LLC

Ideally, your family LLC will give you, as the parents, complete control over management and maintenance of the company. Your children (and their children) will have their own shares in the company, minus the power to make decisions or manage the funds. Essentially, you have created an entity where you have full control to buy, sell, or distribute while future generations have full value minus the ability to make changes. Remember that gifts to your children and grandchildren will be liable for taxes, but you will be afforded a wide range of benefits in addition to reducing your estate. Every state is different, so be sure to work with your local estate planning attorneys for the best results.

While family LLCs may sound like a strange term, they can afford certain estates a wide range of benefits. If you’re worried about estate or gift taxes in relation to your lifetime limit, be sure to check back next time to learn more. We’ll discuss the importance of reducing gift tax liabilities for both yourself and your children. As always, JDKatz is here to provide comprehensive assistance to clients in need. Our estate lawyers in Bethesda help Maryland and DC residents to take control of their futures and create peace of mind for retirement and beyond. Contact us today to see how we can help!