Posted by Paul E. Welborn,Jr. on February 22, 2005 at 13:35:55:
I think since bronchick in his book discusses making the LLC a beneficiary does that not make 2 the LLC is an artificial person, it and you ! a party to a trust.
Trust for Single Member Managed LLC?? - Posted by Scott In PCB
Posted by Scott In PCB on January 02, 2005 at 16:39:39:
Hi all,
I am forming my first LLC. This one is not for real estate but a vending business that is already up and running (and cash flowing nicely). I was reading up in Bill Bronchick’s LLC course when he mentioned creating a revocable living trust which would be listed in the “Names and Addresses of Members” section of the Articles of Organization. I don’t understand how this would work in an LLC with only one member? Can someone give me a brief (or not so brief) explanation? Thanks in advance for any help you can provide.
Scott
Re: Trust for Single Member Managed LLC?? - Posted by Bill Bronchick
Posted by Bill Bronchick on January 03, 2005 at 13:10:52:
Reason is privacy, to keep your name from being associated with the LLC on public record.
If you use someone else as organizer and registered agent, the only way to tie you to the LLC is by listing yourself as member. Instead, list the TRUST as member, so your name is nowhere on there.
Re: Trust for Single Member Managed LLC?? - Posted by chet
Posted by chet on January 03, 2005 at 12:12:16:
In my sin gle member LLC, I as the trustee of my living trust am managing and sole member.
Basically, the reason I did it was for my living trust to own the LLC.
Re: Trust for Single Member Managed LLC?? - Posted by Scott in PCB
Posted by Scott in PCB on January 03, 2005 at 14:04:42:
Mr. Bronchick,
Thanks for your response. This is the first of several legal entities that I will be forming in the first part of this year. I plan on following this with an S-Corp for “flipping” properties, and another LLC (or more for division of assets) for holding rental properties. I have four of your courses and I am sure the will be a big help. You will probably be seeing other posts from me this year. 2005 is the year I’m making my move. Happy 2005 to all!!
Scott in PCB
Re: Trust for Single Member Managed LLC?? - Posted by Rich[FL]
Posted by Rich[FL] on January 04, 2005 at 11:51:14:
That’s exactly how I have mine set up. I have two individual living trusts, one for myself and one for my wife, and they are the members of my LLC. I am simply the manager.
Scott - Happy New Year! We need to get together and compare notes sometime!
Rich
Re: Trust for Single Member Managed LLC?? - Posted by Scott in PCB
Posted by Scott in PCB on January 03, 2005 at 13:57:55:
Chet - Thanks for the response. I hadn’t considered the living trust yet. --Scott
Re: Trust for Single Member Managed LLC?? - Posted by chet
Posted by chet on January 03, 2005 at 18:19:18:
I would be interested in hearing why you choose the s-corp for flipping?
Re: Trust for Single Member Managed LLC?? - Posted by chet
Posted by chet on January 04, 2005 at 12:08:29:
but if you’re the manager or agent of service, aren’t you compromising the privacy provided by the trust?
Re: Trust for Single Member Managed LLC?? - Posted by Scott in PCB
Posted by Scott in PCB on January 03, 2005 at 20:18:55:
Chet - What do you recommend? a C-Corp? I like the through taxation of the S-Corp, but the additional tax savings of the C-Corp would probably make it worthwhile. Are you flipping properties, and if so what entity are you using? Are you cranking the paperwork or is your lawyer doing the minutes, etc.? You seem to contribute quite a bit to this message board so I’m anxious to hear your opinion. --Scott in PCB
Re: Trust for Single Member Managed LLC?? - Posted by Rich[FL]
Posted by Rich[FL] on January 04, 2005 at 19:18:57:
The living trust isn’t normally a vehicle used to establish privacy. It is used primarly for estate planning purposes. Privacy enters into the picture when I buy real estate. It is purchaed via a land trust, the first one with me as trustee just to understand the process and the remainder with someone I know out of state as trustee on subsequent purchases, with the LLC as beneficiary. For the public, I’m just “managing” the property for some trust. It’s up to the public to take the next step in tracking down the trust ownership.
Hope this helps.
Rich
Re: Trust for Single Member Managed LLC?? - Posted by chet
Posted by chet on January 04, 2005 at 01:00:25:
I don’t know. That’s why I was asking.
I decided to go with the LLC as it seemed to give me the most flexibility.
taxed as partnership or corp
no double taxation is taxed as partnership
variety of entities can be owners in an LLC (for pooling of assets)
They biggy for the c-corp is the extra deductions that are allowed such as health insurance premiums.
As for the paperwork, I looked at some software packages/services, but for right now I usually end up having the atty draft the “boiler plate”, and then I reuse.
What additional tax savings do you see w/ c-corp? The lower tax rate?
Re: Trust for Single Member Managed LLC?? - Posted by Dave T
Posted by Dave T on January 09, 2005 at 24:07:38:
Chet,
A single member LLC defaults to a disregarded entity (sole proprietorship) unless you have elected to be treated as a corporation.
A single member LLC can not be a partnership. The LLC must have two or more members to be a partnership.
Re: Trust for Single Member Managed LLC?? - Posted by Scott in PCB
Posted by Scott in PCB on January 04, 2005 at 08:19:21:
Chet - Check out Bill Bronchicks article:
Re: Trust for Single Member Managed LLC?? - Posted by chet
Posted by chet on January 09, 2005 at 24:25:43:
by “partnership” I mean flow-thri to individual return.
Re: Trust for Single Member Managed LLC?? - Posted by chet
Posted by chet on January 04, 2005 at 10:54:30:
interesting summary.
maybe land trust / c-corp is really the best bet for me. esp. w/ the extra tax CA has on LLCs (based on sales not income)
Re: Trust for Single Member Managed LLC?? - Posted by Dave T
Posted by Dave T on January 15, 2005 at 21:14:10:
Fooled me. My earlier response does not change. A single member LLC can not be a partnership, though as a disregarded entity you will get the flow through tax treatment you seek.