There are many advantages to the limited liability company (LLC)
including the financial and tax advantages. Herein we discuss the other
specialized uses and benefits to you for possibly implementing the
limited liability company in your estate planning and business
strategies.
THE LLC IN ASSET PROTECTION
First-time business owners were first unincorporated proprietorships.
As they began to realize the possible loss of their personal assets or
as they started to get in trouble only then did they consider other
types of ownerships. The limited liability company is the most
efficient way to do business. No assets or business should ever be in
their personal name.
In other words, you should "own nothing yet control everything-else."
Personal creditors cannot step in your shoes to take control of your
LLC and your creditor is precluded by law and with unwanted tax
consequences. Under the LLC, members cannot be held personally liable.
Another good asset protection technique to shield your personal and
other valuable assets is allowing the limited liability company own a
"blanket mortgage" on all your assets - that is, in a sense, you owe
money to your LLC. Alternatively, don’t put all you eggs in one basket
and have multiple limited liability companies for multiple types of
risks or multiple layers of legal entities, depending on your risk.
THE LIMITED LIABILITY COMPANY IN REAL ESTATE INVESTMENTS
LLC’s flexibility allow unlimited number of members. LLCs may register
their shares with the Securities and Exchange Commission as publicly
traded securities. In other words, Real Estate Investment Trusts
(REITS) under the LLC umbrella are at far less cost and with less
administrative complications
The United States is the "offshore" for foreign entrepreneurs. Foreign
investors consider the United States as their "offshore" tax-free,
tax-haven jurisdiction due to favorite treatment of their investments
and tax-free status afforded to them. For example, there are no capital
gains taxes on securities purchased in the United States and sold by
foreign investors.
THE LLC IN ESTATE TAX PLANNING AND ELIMINATION OF PROBATE
The LLC is an ideal way to transfer wealth amongst family members. The
older generation (i.e. parents or grand parents) can retain control of
the assets or business by eliminating third-party interests and
restricting membership while eliminating estate and gift tax
consequences. The LLC is a much more practical device for this purpose
with no mandatory distributions to the younger generation (children).
CREDITOR TRANSACTIONAL BENEFITS
Limited liability companies have a distinct advantage when it comes to
borrowing money from traditional institutions such as a bank or doing
business.
CHARTIABLE GIFTING WITH THE LIMITED LIABILITY COMPANY
Charitable giving and fund-raising is better facilitated through an
LLC. Member gifting is passed through to their individual income tax
returns on the federal form 1040.
1040 FLOW THROUGH TAX BENEFITS
You can avoid paying both corporate taxes and personal taxes on your
profits and expenses with the LLC otherwise known as double taxation.
This can be a tax advantage in many cases as the business profits,
losses and expenses flow through to your 1040 federal form as a
personal tax.
PROFIT DISTRIBUTIONS ARE COMPLETELY FLEXIBLE
The profit distributions can vary with any percentage profit sharing
under the LLC umbrella unlike a common partnership at 50/50 split.
MULTISTATE OPERATIONS AND THE PROFESSIONAL PRACTICE PROTECTION WITH THE LLC
Operations in multiple states and professional practices are enhanced
by the use of an LLC. LLCs have long been recognized as traditional
legal business entities. A trust is not afforded such luxury because no
one knows what's the nature of its business purpose.
Essentially, a trust is a private business contract between the grantor, the trustee, and the beneficiaries.
From a business perspective you should consider the LLC in estate
planning and in your business strategy. The limited liability company
has many advantages that aggregate features of a corporation and a
partnership. In America we have the option to set up a business as a
sole-proprietorship (one I strongly do not recommend), partnership and
corporation. In addition, it's only in the United States where we have
the added privilege of benefiting from the formation of a limited
liability company.
Rocco and his team of bonded professional attorneys, CPAs and
accountants help affluent individuals and companies retain control of
their domestic and foreign/offshore assets, protect their assets, build
& preserve their wealth and financially structure their money to
reduce capital gains taxes, estate taxes, inheritance taxes, avoid the
probate process and decrease income taxes.
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Rocco Beatrice, CPA, MST, MBA, Award-winning trust & estate-planning expert
71 Commercial Street #150 Boston, MA 02109 tel: 508.429.0011 fax: 508.429.3034
Click here for more info: http://www.UltraTrust.com, http://ultratrust.com/foreign-llc.html
Disclaimer: All information on this site is provided for informational purposes only! By no means is any
information presented herein intended to substitute for the advice provided to you by any health care or other professional
or organization.
