When people think of setting up a limited liability corporation, or LLC, it is usually for business reasons. For example, a businessperson may like the idea of having some degree of legal protection like what an LLC offers. Moreover, an LLC also offers important tax benefits to businesses.
In some cases, it may even be a good idea for a person to use an LLC as an estate planning device. Basically, to use this device, a couple would spend the money to form an LLC. Typically, the directors and officers of an LLC would be the parents. However, the LLC would also include the children as non-voting members so they can receive the benefits from the LLC.
Once the LLC is set up, a couple can transfer family assets of different types in to the name of the LLC. Ultimately, the idea behind doing so is to transfer assets to the next generation while being able legally to pay less in terms of income taxes and gift taxes.
When a Chicago-area family thinks about estate planning, they may wish to consider forming an LLC as an option, at least as part of broader estate plan. However, this option is not necessarily right for all families. Moreover, the process can involve complicated estate planning that, if not done properly, can wind up having adverse consequences, including negative tax implications.
This is one reason why an Illinois resident who is trying to figure out how to hand down their hard-earned legacy to the next generation should consider speaking with an experience tax and estate planning attorney when engaging in their estate planning. An experienced attorney can help a resident evaluate his or her options and draft the necessary documents.