A family LLC is a way for Florida families to help ensure generational wealth and shield assets from creditors when they have a family business. This is also a way that families can protect assets and minimize estate taxes while passing them down to their children.
Parents can keep control and get tax benefits
Parents will usually form the LLC. Both they and the children will have shares in the business. This can be used for things like businesses or brokerage accounts, but it cannot cover a residence. You may even be able to transfer bank accounts and personal possessions to the LLC. The parents will maintain operating control of the LLC. This keeps decisions of the children from threatening the assets.
Assets in the LLC can be marked down
Once the parents have formed the LLC, they can begin to transfer the assets into it. Transferring assets is subject to the gift tax, but the real savings happens when the assets are discounted because assets that lack control are worth far less than those that have it. This means that you can transfer far more assets than the gift tax limit because they are marked down. This allows you to start transferring the inheritance to your children over their lifetime without getting hit by the gift tax.
LLC laws can be complex, and you need legal help and advice before you begin this process. You need to understand the tax consequences and how this will affect your estate plan. In addition, you should have with the business formation, and that requires an attorney with a corporate expertise. This can be a valuable part of your estate that few people know about. A professional could assist you with getting this into place.