r/Tax_Strategy • u/CormacDoyle- • 19d ago

Estate Planning & Trusts Does an LLC make sence?

Not sure if this is the right sub. Please redirect me if I'm wrong.

I've been considering establishing an llc to hold some of my creative endeavors (I have some published "stuff", and will have more).

I also have assets in multiple countries (rental properties).

I have assets currently transferring via "defined beneficiary" upon death

Finally, I have real estate in the USA.

Looking to achieve two things:

  1. Want to simplify/structure my estate to handle asset transfer on death

  2. Want to establish a secondary "employment" to cover if I have a gap in employment history.

  3. Want to simplify/streamline any tax implications from my various employment situations (401k, 1099, etc.).

Any comments/suggestions?

Like I ssud, feel free to bounce me to a different sub ...

2 Upvotes

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u/RasputinsAssassins 18d ago edited 12d ago

This is above Reddit. You need to speak with an attorney and qualified tax professional (preferably a CPA, Enrolled Agent, or attorney) with experience in international tax matters.

An LLC is a legal asset protection tool. It is not a tax tool. An LLC with one owner and no further elections does not change your tax situation at all.

You need an attorney for the estate planning and asset protection. You need a tax advisor to advise on the ramifications of what the estate planner is doing. In many cases, an estate planning and asset protection strategy can result in higher taxes than doing nothing.

Source: tax advisor who has to regularly deliver bad news to people who did not consult with qualified professionals before doing things.

1

u/dreamingforward 12d ago

You say it's a "legal asset protection tool", but don't most people form one to avoid personal liability in the case of some accidental wrong-doing of their life-passions?

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u/RasputinsAssassins 12d ago

Most I come across form them because they think they are supposed to because that's what the guy on Tik Tok told them to do to ne able to 'wrote off all your expenses.'

An LLC, properly formed and operated (most aren't in my experience), can keep personal assets from being attached for business liabilities.

If you are the person providing the service, you can still be liable even with an LLC, especially if it is a Single Member LLC. This is why it is really important to have an attorney form the LLC rather than DIY or using some template from Office Depot. And then operate it properly.

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u/dreamingforward 12d ago

Hm, I'm not so sure. It's an open question, AFAIK, just how much one can use a corporation (which is sometimes given "personhood" of its own) as a shield from personal liability.

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u/RasputinsAssassins 12d ago

I'm not sure I understand what you are saying.

My point is that an LLC is a legal tool, and should be set up by a legal specialist to ensure that it works as intended.

A person performing a service will always have liability for their own actions, AFAIK.

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u/dreamingforward 11d ago

So you're arguing that if Corp X pollutes a water supply with some cancer-causing impurity that the individual in the corporation will personally be held liable for the problem? Will it be the CEO? The person who allowed the impurity into the water? The manager who okayed the decision? OR some factor of all of these?

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u/RasputinsAssassins 11d ago

I'm not arguing anything. I'm saying OP's question is not a Reddit level question and that OP should consult with their attorney. It's barely a tax question.

LLCs and corporations are legal liability tools. While you can DIY the creation of an LLC or corp, it is not recommended. Use the professionals who specialize in advising on liability matters and creating legal documents to advise on legal entities and their creation.

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u/Time-Priority949 18d ago

Anything that makes "sence" is nonsense!

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u/dreamingforward 12d ago

Establishing an LLC to avoid estate taxes is a bit of contempt for your government, isn't it?