Preserving generational wealth is an important goal for many families, in particular for family-owned businesses. Most business owners are aware of how an LLC (Limited Liability Company) can protect the owner’s personal assets from personal responsibility for the debts or liabilities. Similarly, a Family LLC can be used as part of your estate plan to protect your assets, including a business, cash, possession and personal property, from creditors and taxes while facilitating a smooth transfer of wealth from one generation to the next.
In family LLCs, the parents manage the LLC, and children or grandchildren are shareholders of the LLC’s assets. The parents have the authority to buy, sell, trade or distribute the family LLC’s assets; the children and grandchildren are members who cannot sell their LLC shares, withdraw assets from the company or transfer their membership in the LLC to someone else.
After the family LLC is established, the “stock” in the LLC can be transferred from the parents to other members. This transfer of ownership has benefits including:
• reduced estate taxes when the parent founder dies
• distribute an inheritance to children during your lifetime and minimize gift taxes
• the parent founder retains control of the LLC
Family LLC benefits and requirements vary from state to state. If you own a business or other assets and you want to transfer those assets to your children, grandchildren, or other family members after your death, an experienced estate planning attorney on the best way to preserve generational wealth. Estate planning is complex, and the regulations governing LLCs vary from state to state, so it’s important to work with an experienced Illinois estate planning attorney.
Learn More: 5 FAQs About Generational Wealth
Contact the experienced generational wealth advisors at Estate and Probate Legal Group to discuss how to preserve your legacy for the next generation. Call us today at 630-864-5835.
AREAS WE SERVE: Cook, DuPage, Kane, Lake, and Will counties