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May 7, 2024

Transferring LLC Interest

An important component of legacy planning is transferring ownership interest from your limited liability company to the next generation.

Let’s take a look at this.

We all desire to preserve the family legacy and transferring ownership interests in an LLC to children is a strategic way to get this done. Get the children involved early in the planning process and give them the knowledge and values that will help down the road.

Whether you own rental income property or another business, an orderly transition to the next generation is important for the long-term success of the business. Far too often we see property and other businesses lost due to poor planning. Families get hit with huge death taxes and other issues that destroy the family assets and legacy.

There can be tax benefits when you transfer LLC ownership interests to children. You might be able to use gift tax exemptions, valuation discounts and other strategies.

Holding LLC interests in trust or other protective structures can help to shield family assets from unforeseen liabilities. As parents, you can establish an irrevocable asset protection trust for your children that will hold the family assets, rather than having the kids receive the assets directly. This can guard the family assets from the potential future creditors of your kids.

Many families are broken apart when an organized asset transfer process does not exist. Kids end up confused and fighting over assets. Instead, transparent and fair transfer of LLC ownership interests can promote family harmony.

Parents can foster long term growth of family assets with an efficient transfer process of ownership interests. Children are involved, they take responsibility for understanding and guiding the family business and may bring new ideas to the table to help the business.



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