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Charleston Family LLC Attorneys

Serving Families and Businesses Throughout Charleston County

Effective estate planning gives you a means to provide for your loved ones for years to come. There are a number of estate planning tools that you can use to accomplish this goal. One such device is to establish a Family LLC. Used correctly, a Family LLC can not only help you with estate planning, but it can also protect your assets while you are alive as well.

Not every estate planning tool is the right fit for each individual or family. Instead, you should work with an experienced estate planning attorney to develop a plan that fits your particular needs. 

Our asset protection attorneys at Wiles Law Firm, LLC understand that estate planning is not a one-size-fits-all endeavor. Our experienced team will work closely with you to develop the right solution for you and your family. We know how important preparation for your family’s future is to you, and we will work with you until you have the plan you need.

What is a Family LLC?

A Family LLC is a form of a limited liability company that is created by family members who are blood-related or related by marriage. It is a useful method to protect family assets from creditors, and it can be helpful to divide income among several generations.

Technically,  a Family LLC is no different from any other form of LLC. There is no real requirement that all of the members be related, but for estate planning purposes, that is often what happens in practice. It is a helpful estate planning tool if you want to give several family members rights to the same assets.

The founding member of the Family LLC is usually the managing member. The other members have very limited, if any, management rights. This lack of control in the LLC allows the other members of the LLC to hold significant assets at a discount. Selling memberships is generally not permitted or only allowed in limited circumstances. Nonetheless, the family can craft an operating agreement that adjusts the limitations or restricts as they see fit.

Operating Agreements in Family LLCs

Perhaps the most appealing part about developing a Family LLC is that you can create an operating agreement that works for you and your family. It is very flexible. Most family-based LLCs will restrict transferring membership and ownership rights as that is the term that protects the assets from creditors. Other than a few other basic requirements, the managing member is free to craft the agreement however he or she sees fit. 

For example, you can explicitly state in the operating agreement that any member has to be a family member, either blood related or related by marriage. Transferring membership to anyone else could invalidate membership rights. You can even go as far as to exclude family members that are only related by marriage, such as passing the LLC rights to your children or grandchildren, but not their spouses. Your attorney can work with you to develop an operating agreement that accomplishes your goals for your Family LLC.

The Family Business

While many Family LLCs are based on a family business, they do not have to be. However, this estate planning tool does work well for family businesses. It provides a means for families to separate their personal accounts and their business. It also gives families a viable method to pass business assets on to other family members without having those assets in their estate. It works well for:

  • Rental properties
  • Real estate holdings
  • Brokerage accounts
  • Investment assets (such as mutual funds, stocks, and bonds)
  • All of a family business or any portion of it

Keep in mind that personal residences generally should not be included in an LLC. A more traditional trust is often a better option for an individual home.

Family LLCs and Asset Protection

In addition to being an ideal estate planning option, Family LLCs also have the added benefit of providing asset protection for you and your loved ones, even while you are alive. Placing assets in a family LLC protects them from creditors, even when those creditors have accounts with your family members. 

Limited liability companies provide charging order protection. In fact, charging orders are the exclusive remedy for creditors to collect against an LLC member in South Carolina. 

Without this type of protection, you may be forced to turn over your interest in the LLC to a creditor. That also means that the LLC ownership could be compromised by a creditor take over. With charging over protection, you do not have to worry about this type of situation. The only asset that a creditor can take from an LLC member related to the LLC is any income distributions or profits you obtain from the LLC. That way, the LLC’s integrity is not compromised by any member’s personal creditors. 

Creating a Family LLC

While Family LLCs have many benefits, they are somewhat cumbersome to maintain. Family LLCs have many of the same filing and upkeep requirements that corporations would have, including necessities such as:

  • Holding annual meetings
  • Keeping regular books and records
  • Regular filings with the Secretary of State
  • Tax requirements, including obtaining an EIN 
  • Business licenses
  • Assigning an agent for service of process

Because maintenance of the LLC is so essential, it is a good idea to pair up with an experienced attorney who can keep on top of these legal requirements on our behalf. 

Finding an Experienced Estate Planning Lawyer

A family LLC can be a great estate planning tool. It can also be a helpful way to plan and protect your family both while you are still alive and for years to come. Explore your options with the team at Wiles Law Firm, LLC. Our experienced asset protection lawyers can help you structure an operating agreement that works for you and your family to safeguard the wealth you have worked hard to amass. Contact us today to schedule a wealth planning consultation.

Wiles Law Firm, LLC helps clients with their estate planning needs in Charleston, South Carolina and the surrounding areas such as West Ashley, Summerville, North Charleston, Mount Pleasant, and John's Island.

Information on this website is not legal advice. Further, viewing of the enclosed information does not create an attorney-client relationship with Wiles Law Firm, LLC. Matters will be handled by attorneys who primarily practice out of our office in Charleston County located at 852 Lowcountry Blvd., Ste. 101, Mt. Pleasant, SC 29464. M. Emerson Wiles, III is the attorney responsible for this advertisement.

Any result Wiles Law Firm, LLC may achieve on behalf of one client in one particular matter does not necessarily indicate similar results can be obtained for other clients. Please contact a South Carolina estate planning attorney or one of our attorneys with Wiles Law Firm, LLC for a consultation regarding your unique estate plan.

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852 Lowcountry Blvd., Suite 101, Mount Pleasant, SC 29464
| Phone: 843-718-0232

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