For estate planning purposes, Hook Law Center can assist you in forming a family limited liability company (“FLLC”). A family limited liability company is a standard limited liability company owned exclusively by family members, typically made up of two classes of ownership interests, voting and non-voting, and managed by a “manager” selected by the owners or members.
Why should we form an FLLC?
Protect assets while allowing them to remain in the family.
Reasons to form an FLLC include tax advantages, including saving on income taxes, and protecting some funds from gift and trust taxes. Also, an FLLC allows fractional interest gifts of assets such as real estate, can help make managing and inheriting assets more streamlined, and can grant a degree of privacy for members when it comes to disclosing information on estate assets.
Forming an FLLC also allows members to protect their personal assets from the outside, including the business debts, contract issue or liabilities of the FLLC. It also protects the assets of the FLLC from inside; the FLLC is safe from any creditors that may go after a member’s assets. Creditors cannot take the place of a member or force a member to sell that member’s interests to clear a debt.
At Hook Law Center, we know that forming a FLLC must be done with due care to ensure that it is operated as an actual business, including compliance with applicable laws, ongoing maintenance of accurate records, and proper titling of assets. Our experienced estate planning attorneys will work with you to put into place this powerful tool, which protects assets and ensures an orderly succession plan. Forming a FLLC, when properly designed and operated, can benefit you and your family to the fullest extent possible.