If you’re a business owner, you’re likely familiar with the corporate structure of a Limited Liability Company (LLC). This business structure protects business owners from being pursued for company debts and liabilities. LLCs have various benefits. However, many overlook the advantages of this structure when their estate planning. Don’t make the same mistake. If you have a large estate or other valuable assets, you should consider creating a family LLC. Please continue reading to learn how a Family LLC can benefit your estate plan and how a knowledgeable Montgomery County Estate Planning Attorney can help you make informed decisions about your future.
How Does a Family LLC Work in an Estate Plan?
Although LLCs are primarily used to protect your assets if you own a business, they can also be helpful in estate planning. This is particularly true if you establish a family LLC, which can shield your assets from creditors and ensure a smooth transfer of your assets to your beneficiaries without incurring gift and estate taxes. Once an LLC is established, you can transfer funds, properties, any business you own, and other assets. All assets placed into your family LLC will be safeguarded from creditors.
To establish a family LLC, participants must be related to one another by blood, marriage, or through adoption. Generally, one family member manages the LLC. As a parent, you will be designated as the managing member of the LLC, while your children will be designated as non-managing members. The LLC will spell out ownership rights for each member.
A significant benefit of transferring your assets into this type of LLC is that it can minimize estate taxes. This will allow you to transfer more of your estate to your heirs. This type of LLC can also help you have more control over your assets and better pace out the transfer of wealth during your lifetime to make the most of the tax exemptions and exclusion limits. Many families create this type of LLC to prevent assets from being transferred outside of the family to preserve their legacy of wealth.
Should I Consult an Attorney?
If you’re considering establishing a family LLC to be included in your estate plan, it’s in your best interest to enlist the help of an experienced attorney who can guide you through every phase of this complex legal process. Thorough estate planning using the right combination of documents will ensure your current and future needs are met. After working to maintain a successful family business, you should take the necessary steps to protect it. An attorney will help protect your valuable assets and take advantage of estate and gift tax savings through a family LLC.
For more information about Maryland estate planning, please don’t hesitate to contact a determined attorney from the legal team at JD Katz. We are prepared to help you protect your assets and family today.
