We help small business owners create holistic strategies that include succession and estate planning solutions. It all starts with the business structure that you choose when you initially launch your enterprise.
During this phase, you have some decisions to make, and you should make them in a fully informed manner.
Personal liability is something that should be in the forefront of your thinking when you are establishing a framework. You want to separate your personal property from your business, and there are different ways that you can go about it.
Limited Liability Company
One possibility would be the creation of a limited liability company (LLC). When you establish the structure, generally speaking, you would separate your personal property from the actions of your business. This means that the property would be out of the reach of most creditors and litigants that file suits against the LLC.
Another major advantage is the pass-through taxation that you enjoy when you establish a limited liability company. Though you get the asset protection, you can claim your profits and losses on your personal income tax returns, and you would be taxed at your regular rate.
Family Limited Partnerships
Another asset protection business structure is the family limited partnership (FLP). If you establish an FLP, you would be the general partner, and you would add members of your family to serve as limited partners. As the general partner, you would make all decisions on behalf of the partnership.
Will use a simple example to explain the asset protection value. Let’s say that you own two different apartment buildings. You could convey each of them into a separate family limited partnership.
If someone files a lawsuit after getting injured in one of the apartment buildings, they would be suing the FLP that owns it. Your personal property and property that is owned by the limited partners would be protected, along with the other apartment building.
You could leverage the property so that the FLP has a limited equity interest to maximize the asset protection.
There reverse protection as well. If you or one of the limited partners was to be personally sued for some reason, the properties that are in the family limited partnerships would be protected.
People that are exposed to the estate tax can use family limited partnerships to transfer property among one another at a tax discount, and this is another benefit.
Attend a Free Webinar
Our attorneys have traditionally held seminars in an effort to pass along valuable information to members of our community. In light of the impact of the novel coronavirus, we have put them on hold, but you can take advantage of a convenient alternative.
We are now offering webinars, and there is no charge to attend them. If you are interested, visit our webinar schedule page and click on the date that works for you.
Take Action Today!
If you have been procrastinating as you go through life without an estate plan, now is the time for action. You never know what the future holds, and it is very important to take the right steps to express your final wishes and protect yourself and the people that you love.
Safety is of the utmost importance to us. With this in mind, we are offering consultations through video teleconferencing, so you can get the same level of service without taking any risks.
You can send us a message through our contact page to request an appointment, and we can be reached by phone at 513-721-1513.