An LLC formation can allow you to start your dream business, but it’s also a powerful estate planning tool. With the help of an LLC Formation attorney, you can receive expert guidance to protect your assets, reduce taxes and retain your family’s wealth.
What Is An LLC?
A Limited Liability Company (LLC) is a type of ‘hybrid’ business that combines the limited liability protection of corporations with the flexible and manageable tax structures of a sole proprietorship or partnership.
LLCs In Estate Planning
Forming an LLC can be the beginning of an epic, life-changing adventure. For many, it’s an entrepreneurial dream.
For others, it can be an extremely useful estate planning tool or both. If, for example, you want to transfer your assets to your children but are worried about estate taxes and gift taxes, then an LLC can help you reduce the blow significantly.
- An LLC can be used to pass assets down to your family while minimizing gift taxes or estate taxes.
- LLCs can allow your heirs to become shareholders, which allows them to benefit from the LLC’s assets.
- Maintain control of your assets.
- Shield assets from creditors.
- Lower estate taxes.
Family LLCs allow the parents to maintain control while their children and grandchildren hold shares in the LLC’s assets. Parents can still be the decision-makers, while their heirs can receive gift shares and other benefits.
Once you’ve established your Family LLC, you can begin transferring assets. Then you can translate the value of the assets into LLC units of value. Finally, you can then transfer ownership of the LLC units to your heirs.
A transferred share will still count as a ‘gift’ under Florida’s gift-tax laws, but it can be discounted by up to 40%. Doing this properly can provide tax benefits and lower the value of your Estate significantly.
When you pass away, your heirs could inherit your ownership interest in the LLC through your Estate. This can then allow them to distribute the LLC’s assets or continue with the LLC.
What Assets Can be Transferred into an LLC?
You can generally transfer nearly any type of asset into an LLC, including:
- Cash – Transfer money from your personal accounts into the LLC to then distribute it with LLC members
- Property – Transfer title to land and buildings into your LLC.
- Personal Possessions – Transfers cars, stocks, jewelry and other valuable belongings.
Why Do You Need an LLC Formation Attorney?
Estate planning is very complex, especially when it comes to meeting LLC regulations that change fast. This is especially true when it comes to Estate Planning.
Our LLC formation attorneys are ready to assist you with setting up an LLC for your family, ensuring you follow all regulations, paperwork to meet your goals.
Note that although online LLC formation services exist, they are notorious for causing mistakes and poor advice. The last thing you want is a costly lawsuit or dispute from an improper LLC formation. Nothing substitutes for the advice and counsel of an experienced, licensed attorney.
Our Florida LLC formation attorneys can provide support with:
- Writing LLCs ownership interest into your Will or Trust.
- Drafting and revising legal parts of your LLCs plans.
- Consultation on which business type is suitable for your goals.
- Explain all issues from tax to management.
- Drafting and submitting all required LLC formation documentation, including tax forms, partnership agreements, shareholder agreements, founders agreements, succession planning agreements, Articles of Organisation and more.
- Secure permits and licenses.
- Advise you with the set-up of your business and guide you to comply with all regulations and requirements.
- Act as a registered agent for your LLC.
Key Features of Florida Limited Liability Companies
Florida’s LLC statute has been revised in recent years to help Florida keep up with the modernization of LLC law in the U.S. There are various key benefits:
Limit Personal Liability
As the name suggests, one of the main draws of an LLC formation is the protection you gain for yourself and your assets.
An LLC is a separate legal entity to its members and owners. The people involved are not personally liable for the LLC’s debts and legal liabilities.
You’re The Boss
LLCs allow you to be the sole owner of your business, giving you the freedom to call the shots. However, unlike a sole proprietor, personal liability issues are removed. If there are two or more owners, you can create an operating agreement to state your roles and obligations.
Pass-Through Tax Treatment
Standard corporations can leave you facing double income taxations – with both the corporation’s profits taxed and shareholders forced to pay income taxes on any dividends.
If you choose an LLC formation, you can receive ‘pass through’ treatment. This allows allocated profits to be taxed only once on your individual income tax return.
An LLC formation will allow you to gain flexibility over structuring ownership interests. LLCs allow for different classes of ownership, which can offer attractive equity investments without affecting the control of operating members.
How to Form an LLC in Florida?
Although LLC formations are considered less complicated than other business types, there are still plenty of rules, regulations and paperwork to complete. This is especially true when relevant to Estate planning. The expertise of an LLC formation attorney can help you every step of the way.
Choosing a Name
When making an LLC formation in Florida, you need to select a business name. This is a little trickier than you might think, as all LLC names must comply with Florida’s naming rules.
For example, the name must include ‘Limited Liability Company’ or an approved abbreviation such as ‘Ltd.’ or ‘LLC..’
The LLC name must also be unique from other LLCs in Florida or trademarked names. You can search if your desired LLC name is available online.
Appointing a Registered Agent
A registered agent must be appointed and named in the Articles of Organization. This can be a person or a business entity. The agent serves as a representative of the LLC and will accept legal documents on its behalf.
Filing Articles of Organization
An LLC formation requires that you file ‘Articles of Organization with the state. These documents state the names and address of the LLC, its registered agent, managers and creation date of the business. The registered agent must sign it.
This can be a tricky process, so contacting an LLC formation attorney can ensure you complete every step appropriately.
Tax and Reports
The IRS and the State of Florida examine LLCs closely. All LLCs in Florida must obtain an Employer Identification Number (EIN) while also keeping accurate annual reports. There may also be further business licensing requirements depending on your scenario.
Your LLC formation attorney may advise you to complete other paperwork, such as an operating agreement. This can help you set up the business structure, owner responsibility, percentage of ownership, and company’s future direction.
Wills and Trusts
Including the ownership of your LLC in your Last Will or Trust is an essential part of an LLC formation for Estate planning purposes. Expert advice is needed here to ensure your family’s goals are met and to make the succession of ownership as smooth as possible.
Contact a Florida LLC Attorney
If you want to start a Limited Liability Company for Estate Planning purposes, you should contact a Florida LLC formation attorney.
Doing so will gain you the support of a highly experienced legal expert, so you can ensure you minimize losses from tax and retain your family’s wealth.
Battaglia, Ross, Dicus & McQuaid, P.A. is a U.S. News and World Reports Tier 1 law firm in Florida, specializing in Estate Planning & Probate since 1958. With award-winning experienced attorneys, they give you the best chance of getting the resolution you hope for.
Schedule a free consultation today to get started or to get any questions answered.