08 Jan Estate Planning with an LLC
In our last blog post we discussed the benefits of forming a Limited Liability Company for asset protection, taxes, and company structure. Because Phelps LaClair is the leader in the Phoenix Valley when it comes to estate planning, we have many Estate Planning options for you to consider. Our topic today is Estate Planning with an LLC.
There is an old movie starring Lionel Barrymore and Jimmy Stewart about an eccentric family living in the midst of a neighborhood that is being converted from a residential area to a commercial business center. A banking tycoon keeps offering the family more money for the house, but the elderly owner won’t sell. He realizes family is more important than instant monetary gain, and he wants to preserve the property for his children. The truth about wealth is in the title of this movie: “You Can’t Take It With You”.
Like the wise man in the movie, you want to be able to pass your wealth along to your family. One of the ways you can do this is by forming a family LLC. With a family LLC, you control the assets. The children can own shares in the assets, but will not have voting or management rights. You can also restrict their ability to sell their shares or withdraw from membership in the company. It is a great way to transfer wealth to younger members without incurring the risk of immature or unwise financial decisions.
There are several tax benefits that come into play when you structure estate planning with an LLC. You can transfer up to $15,000 per year to each of your heirs without having to pay gift taxes. If you are married and filing jointly, you can give up to $30,000 to each heir. You can also apply a discount up to 40% of the value of the assets that are transferred to family members within the LLC. Finally, the estate taxes that your beneficiaries would need to pay on their inheritance upon your passing will be reduced because you will have already distributed a portion of your wealth to them. This could make forming a family LLC a serious consideration for you.
With offices in Phoenix, Chandler and Mesa, Phelps LaClair has been serving the Phoenix area for over 40 years by offering, among other options, Estate Planning with an LLC. We’re a second generation law firm that understands everyone needs a sound plan for their estate, whether it’s modest or enormous. We would like to help you navigate through the many options available to you. Give us a call so we can set up an appointment to discuss your unique (and perhaps eccentric) situation. After all, you really can’t take it with you.
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