LLC (limited liability company) can provide a vehicle for passing wealth to younger family members without having to re-title the real estate. Once real estate is transferred into an LLC, the members’ interest is converted to personal proerty, which is represented by their LLC “shares.” These shares can be transferred incrementally to children as tax-free gifts (currently $12,000 per donor per donee per year). The process for transferring LLC shares is very simple. The parents can still retain control of the property during their lifetime by acting as “managers” for the company. Using this method, you can pass real estate to others without any tax consequences. LLCs can play an important role in your overall asset protection, estate planning, and tax strategies.
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