When you hear the phrase Limited Liability Companies (LLC) you probably think of small business owners, but did you know that LLCs can be a useful tool in your estate plan? If you’re someone who has a large estate – perhaps you own multiple homes or properties, or have other valuable assets including financial accounts – an LLC can be helpful if you want to transfer any of your assets to your children without incurring gift and estate taxes.
How a Family LLC works in an Estate Plan
An estate planning attorney can help you and your children create an LLC together. As a parent you’ll be designated as a managing member of the LLC, while your children will be designated as non-managing members. As a managing member you’ll have control over any assets transferred into the LLC, while your kids, as non-members, will have certain restrictions about what they can and cannot do.
Once the LLC is established, you can transfer cash, your home, any real estate holdings, any businesses you own, and other assets into it. All assets transferred into your LLC are protected from creditors, and LLCs give you more control over managing your family money, properties, and other assets. Once transferred into an LLC, these assets are also protected from incurring certain taxes, such as gift and estate taxes.
Why you need an experienced estate planning attorney
We always recommend working with an experienced estate planning attorney when setting up your estate. There is a lot of paperwork to do and processes that must be followed, and an experienced New Jersey estate planning attorney will help you navigate the process. If you want to create an LLC to be included in your estate plan, you’re required to abide by additional rules and regulations, and you will benefit greatly from the guidance of an experienced lawyer.
For more information about New Jersey estate planning, or if you have any questions about including an LLC in your estate plan, please contact our team at SCC Legal today. We look forward to hearing from you.