Contact us today: 843.718.0232
Share

Charleston Estate Planning & Asset Protection Blog

Monday, November 19, 2018

What Should Your Family LLC Operating Agreement Address?

Estate planning involves using various estate planning tools to protect your property and your family. With a comprehensive estate plan, you can accomplish even more goals, such as reducing or eliminating estate taxes, preparing for retirement, and protecting your assets from creditors. You may or may not use the same estate planning tools as another person because your situation and finances are unique.

One of the tools our South Carolina estate planning lawyers discuss with some clients is a Family LLC. With a Family LLC, you can increase and enhance many of the benefits of estate planning we discussed above.

What is a Family LLC?

An LLC is a Limited Liability Company organized under state laws. It is a type of business entity that provides many of the benefits of a corporation or partnership without the formalities and costs of operating a corporation or partnership. Owners are referred to as “members” of the LLC. Members may have various degrees of management authority.

A Family LLC is no different from any other LLC, except that its members are typically limited to blood relatives or relatives by marriage. In addition to protecting assets and reducing estate tax, a Family LLC can give family members access to the same assets. While a Family LLC may not be needed in all cases, it is an estate tool that you want to discuss with your South Carolina estate planning attorney.

Operating Agreements in a Family LLC

An LLC has an operating agreement that provides the structure for the LLC. The agreement outlines how the LLC will be owned and the authority given to each member. The agreement also explains the purpose of the LLC, provides details about the internal management of the company, and, describes the day-to-day operations of the LLC.

The advantage of a Family LLC is that the operating agreement is extremely flexible. The managing member or members can create an operating agreement that is tailored to their needs and desires. While there are a few basic requirements that must be included in a Family LLC Operating Agreement, the individuals are free to draft an agreement that meets their needs.

Some Important Elements of a Family LLC Operating Agreement

Your South Carolina estate planning attorney assists you in choosing the provisions of your Family LLC Operating Agreement. However, a few of the important elements that you should include in your agreement include:

  • The purpose of the LLC. Is the LLC being formed to hold title to a family business, vacation home, or rental property?
  • Explain the authority granted to the various members. Most Family LLCs are member-managed companies. You may have one or more managing members.
  • The term of the LLC and how the term and the LLC will be terminated and liquidated.
  • An explanation of the capital contributions of each member, capital accounts, and liability of members.
  • How the net profits and net losses will be shared between the members, including cash or property distributions.
  • The procedure for assigning, selling, or transferring a member’s interest in the LLC. Most Family LLCs limit the members to blood relatives. In some cases, families also include relatives by marriage. Regardless of how you choose to limit the membership in the Family LLC, your operating agreement should be extremely specific so that the provisions cannot be challenged or changed unless all members agree.

Contact a South Carolina Estate Planning Lawyer to Discuss a Family LLC

If you are interested in forming a Family LLC, our South Carolina estate-planning lawyers are happy to discuss this estate-planning tool in greater detail during a consultation. Schedule a consult with one of our South Carolina estate-planning lawyers today.

 


Archived Posts

2019
2018
2017
2014


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.



© 2019 Wiles Law Firm, LLC | Disclaimer
852 Lowcountry Blvd., Suite 101, Mount Pleasant, SC 29464
| Phone: 843-718-0232

Wills & Trusts | Asset Protection | Irrevocable vs. Revocable Trusts | Community Property Trust | Stand-Alone Retirement Trusts | Family LLCs | Gift Trusts | Inheritor's Trusts | High Net-Worth Estate Planning | Special Needs Trusts | IRA Trusts | LLC Formation | Powers of Attorney | Guardianships | Conservatorships | Pet Trusts | Special Needs Planning | HIPAA Authorization | Trusts for Minors | Living Wills | Gun Trusts | Veterans Planning | Spousal Lifetime Access Trust (SLAT) | Estate Planning for Farmers | Wills vs Revocable Trusts | Beneficiary Rights | Probate & Trust Administration | Estate Planning | Incapacity Planning | Family Protection and Wealth Transfer | Advanced Estate Planning | | Resources | Contact Us | About Us | Practice Areas

Google+Twitter

Attorney Website Design by
Zola Creative