By David Walker, Attorney at Law
Recently a client wanted to protect his new house from lawsuits or creditors. His ex-wife was constantly filing suits against him. He has four minor children.
He decided to place ownership of his house in a limited liability company (LLC). The children own a minority interest in the LLC. He will give them a small percentage each year so that eventually they will own the majority of the LLC. However, the children own nonvoting interests, while his share is a voting interest. Creditors generally will have more difficulty reaching LLC shares than outright ownership of property.
Why an irrevocable trust? With a revocable trust, the owner of the assets (the Grantor) retains too much power over the disposition of the trust assets. This direct control nullifies possible defenses against potential frivolous lawsuits. The property is also still considered to be owned by the grantor for estate tax purposes.
With an irrevocable trust, all of the property in the trust, plus all future appreciation on the property, is out of the taxable estate. That means ultimate estate tax liability may be less, resulting in a more tax efficient way to transfer accumulated assets to beneficiaries.
David Sinclair Walker, Jr. P.C. P.O.BOX 871329, Stone Mountain GA 30087;
North Gwinnett Office - 6340 Sugarloaf Parkway, Suite 200, Duluth GA 30097;
South Gwinnett Office - 2330 Scenic Highway, Snellville GA 30078
Telephone 770-972-3803; Facsimile 770-921-7418 email email@example.com
-Admitted in GA and D.C. -UGA Law ’76 -Certified Mediator -Georgia Bar No. 731725770) 972-3803 or visit http://www.walker-law-firm.com/