Using an LLC for Estate Planning

A limited liability company (LLC) is a well-established hybrid legal entity that may be beneficial for business owners, and also a powerful tool for estate planning.

For estate planning purposes, you want to transfer assets to your children, grandchildren, or other family members, but you are concerned about gift taxes or the burden of estate taxes your beneficiaries will owe upon your passing, forming an LLC may be the answer.

Overview:

• A limited liability company (LLC) may be a useful legal structure to pass assets down to your loved ones while avoiding or minimizing estate and gift taxes.
• An LLC may allow family members to become shareholders who can then benefit from the assets held by the LLC, while you retain management control.
• The tax benefit of the LLC is that the value of the shares transferred to heirs may be able to be discounted.

What Is an LLC?

An LLC is a legal entity recognized in all 50 states, although each state has its own regulations governing the formation, running, and taxation of these companies.

The regulations governing LLCs vary from state to state. Therefore, you should always check with your attorney, CPA, and financial advisor before forming an LLC.