Land ownership never goes out of style, and real estate often gains value as time goes by. Limited liability companies (LLCs) and partnerships provide families with a way to ensure that property stays within the family. An estate planning attorney in Los Angeles can help you establish a partnership for a smooth transition of funds and property to future generations.
If your family is looking for a way to ensure the valued property is owned by family members, consider opening an LLC. Legal experts offer real-life solutions to your concerns about family law and estate planning services.
What is Estate Planning?
Estate planning is a form of financial planning that focuses on what will happen to your assets after your death. It can also include instructions for settling your affairs after your death, such as burial plans, the money for a headstone, and more.
A legal professional can draft documents such as wills and trusts and estate planning ensures that your final wishes are legally binding—giving your lawyer a way to carry them out.
For example, when you write a will, you can dictate who receives your assets—from bank accounts to jewelry. You can say that your sister gets all your collectible paintings, while your daughter receives your shoe collection.
It's also possible to reduce estate taxes through gift tax planning. Professional financial and legal services will help you save money in the long run.
Working with an attorney who specializes in trusts and estates will open up many possibilities. You can save a lot of money on taxes and ensure that your beneficiaries reap the benefits.
What is a Family Limited Liability Company?
Limited liability companies have traditionally been used to organize small businesses. It allowed them to handle their taxes in a simpler way and reduce their personal liability for company matters. LLCs have operating agreements that allow a group of people to be responsible for one company.
It has traditionally been used for business succession planning, but it can also be used for high-net-worth families. In the case of family LLCs, this translates to dividing up property ownership among family members in terms of percentage. They can all own the same percentage or different amounts, depending on the situation—making it easier to handle estate matters and avoiding probate.
This situation can dovetail neatly with estate plans and ensure that property transfers smoothly to beneficiaries. That way, the entire family can maintain ownership of something like an apartment building or a farm that would otherwise be difficult to divide.
For example, instead of writing out a complicated will, a family may decide to form an LLC and give a large number of family members partial ownership. If one member of the family passes away or decides to give up their ownership, the rest can maintain ownership without worrying about losing the property.
A Los Angeles estate planning lawyer can handle the entity formation process and make sure it goes through quickly and effectively.
What is a Partnership?
A partnership is where a family owns a business together and works together. They can also be used to protect assets of all kinds, from cash to vehicles to real estate.
In a partnership, there are both general and limited partners. This creates two tiers of membership. Only general partners have a say in important managerial decisions.
Partnerships can make estate administration easier, and they also offer tax breaks in Los Angeles, CA. Business law experts or estate planning lawyers can help you learn more about this option and how it may affect your estate plan.
Family LLC Vs. Partnership - What is the Difference?
Family LLCs and partnerships have several similarities and provide many of the same benefits. They are both ideal for closely-held businesses. A partnership is similar to an LLC in that multiple people can have ownership of it. However, there are some crucial differences between these business entities.
One major difference is cost. Since LLCs offer the desirable feature of limiting personal liability, they cost more to upkeep. You will need a reliable estate planning lawyer.
Partnerships also allow members to pass down shares to their children as part of an inheritance, and this comes with tax benefits. It also limits the reach of probate law, saving your family time and money.
A partnership does not provide legal protection from liability for general partners. Limited partners do enjoy limited liability, however.
In a partnership, all members still have personal liability for the business. That means that if someone trips on a broken step, for example, they can take out a personal injury case against you specifically, which can potentially put your assets at risk.
Using Family LLC and Partnership in Estate Planning
Both family LLCs and partnerships in estate planning can keep properties in the family. They have slightly different effects, however. For example, if your shared property is a rental, then an LLC may make more sense because liability is a concern.
It also allows all members to take on equal responsibility, giving each member a say in business decisions. A family-limited partnership provides asset protection and simplifies probate matters. Instead of dealing with a lengthy legal process, beneficiaries inherit their share right away and offer tax benefits.
Carefully laying out your estate planning process reduces your chances of dealing with estate litigation and other issues. When you find the right law firm, you can rely on them to help with all of your business planning needs and even post-death administration.
Keep Your Family Property Secure with McKenzie Legal & Financial
If you own significant property, it's worth the time and effort to find a legal solution that will keep it within the family. Working with an estate planning attorney in Los Angeles will show you a variety of ways to handle your estate, including LLCs and partnerships.
McKenzie Legal & Financial has a dedicated legal team that can ensure your property stays within your family. We will handle all of your estate planning needs.
Our attorney is a member of the state bar, a registered financial consultant, and has spent decades providing legal services in the Los Angeles area.
Get in touch today for a free consultation so you can learn more about your options for income tax planning and more. Contact us at 562-594-4200 at McKenzie Legal & Financial today!
