Los Angeles County and Kern County - Family LLCs, LLPs
If you have successfully built a family business into a substantial asset, you will need to address the future of the business in your estate planning. Depending on how your business is organized currently, it might be advisable to consider formation of a family limited liability company (LLC) or limited liability partnership (LLP) to hold business assets and remove them from your estate. For additional information about the role of family business planning and entity selection in your broader estate plan, contact the Antelope Valley estate planning lawyers at Thompson Von Tungeln, A P.C., in Lancaster.
If you hold the stock of a family business in an S-corporation or wholly owned entity of any kind, transferring business assets into a family LLC or LLP may be an effective means of keeping assets from your estate out of probate and limiting estate tax liability. Family Business Succession Planning also can help you determine who will operate the business in the next generation.
Recent Tax Court rulings have subjected the transfer of business assets into family LLCs or LLPs to increased scrutiny, but the decisions provide the experienced practitioner with valuable guidance for avoiding unpleasant surprises. The main constraints on the transfer of family business assets concern the timing and business purposes of the transfer. The transfer should be made while the owner is still in effective control of the daily operations of the business and not on his or her deathbed. The assets transferred, as well as the entity that receives them, should relate closely to the business, and the transfer should serve a purpose other than the avoidance of estate taxes.
Family business planning also can address the eventual sale or liquidation of the business, if the next generation is occupied in other professions or would benefit more from the proceeds of sale than the preservation of the assets.
For more information about our ability to advise you about family business planning in the context of your overall estate plan, contact an experienced attorney at Thompson Von Tungeln, A P.C. in the Antelope Valley.