Pratt and LeFevre Corporation |
A monthly newsletter brought to you by your Pratt and LeFevre Corporation Team |
VOL. 1, ISSUE 8 | August 2022 |
SINGLE MEMBER LLC VS MULTI MEMBER LLC, | ||
LLC; Limited Liability Company was created in 1977 by the state of Wyoming. It was slow to take off and Delaware finally filed the first LLC in 1991. Today LLCs are being formed three or four to one compared to corporations. Some lawyers formed this new type of entity, believing this would guaranteed that the maximum liability of any owner was limited to his investment in the company. However, there is a misconception when it comes to single member LLCs believing they have full protection. Below is a chart showing the difference between a single member vs a multi member LLC. |
At Pratt and LeFevre Corporation, we recommend multi member LLCs, taxed as a partnership with your Trust being one of the members, along with the asset transfer of some personal assets to your LLC, which could improve the deductions to your business. YOUR BUSINESS STRUCTURE TYPE MAKES A HUGE DIFFERENCE IN TAXES! For more information, just drop us an email at info@prattandlefevre.com |
Question and Answers |
Will the property I own in my LLC go through probate with a Trust and Pour-Over Will?
If your Trust is one of the owners of your business, at your death, the trust can continueto operate the business regardless of probate. You also should have a Pour-Over Will. All wills have to be probated. A Pour-Over Will is for items not given away previously orput into a trust. Your initial trust will be a Revocable Trust (Living Trust) to allow you control in thebeginning of your business. It is our belief that you do not want to put property into a revocable trust. This type of trust does not protect assets. It is used to allow you to remain in control of your assets. For that reason you should only put any potential capital assets (houses, land, cars, furnishings) into a multi-member LLC, of which the Trust is one of the members. This LLC is not publicly visible, meaning it has no contracts or legal obligations with any one or any entity outside your business organization. When you die the trust can continue to operate the LLC and control the assets owned by the LLC. Thus, the trust controls the assets and the business without probate. Any assets you have not transferred into the LLC or into the trust before your death, will be transferred to the trust via the Pour Over Will after probate. Based on what has been shared with this company by more than one trust attorney, probate of a Pour Over Will is much simpler. It has always been our belief and recommendation that a person should only transfer into the trust, initially, their personal clothes, jewelry, books, art, and other personal items. This action, plus placing a minimal sum into as saving account, is known as “funding” the trust. A Revocable Trust allows you more control over the assets. When you die, the Revocable Trust becomes an Irrevocable Trust, which does protect assets but cannot be changed or assets disbursed, only through the Trustee. The Trustee can only do so as allowed by the Trust Document. Is your Trust set up and up to date? If not, schedule an appointment with one of our Account Executives, with a subsequent interview by a trust attorney. |
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We have added more team specialists. https://prattandlefevre.com/our-specialists/ Each of our specialists follow the O.N.C.E. (Own Nothing, Control Everything) Process in their own business. Our team has their own successful business and contracts with Pratt and LeFevre Corporation to work with clients, bringing their expertise in business, accounting, taxes, financing, marketing and more. Visit our website today to learn more about Pratt and LeFevre Corporation team of specialists ready to work with you. |
DISCLAIMER: Pratt and LeFevre Corporation has several attorneys on retainer. Any information contained herein should not be considered legal advice. The above is only an explanation of instructions given to Pratt and LeFevre Corporation by our attorneys which we have been given permission to explain from a lay-person’s point of view only. Any clarification or questions must be answered directly by an appropriate attorney. |
Pratt and LeFevre Corporation |