LLC Planning For Your Family & Business

When it comes to understanding your estate and planning for it, the key concept is ownership. How do you own your assets? How should you own your assets? How can you easily pass along this ownership to your loved ones?

When it comes to business assets, whether in the context of ordinary day-to-day operations or as a business owner setting up your estate plan, ownership is still the name of the game. One question that arises, then, is whether your assets should be spread across separate or multiple LLCs.

I came across a recent article in CPA Magazine and, according to the author, whether you should start splintering your assets into multiple LLC depends a great deal on what you hope to accomplish. No surprise there.

However, to many it’s simply a question of liability and risk protection, but then there are other goals. Namely, splitting into multiple business entities will allow your company to move the ownership of assets around between family members or employees without necessarily dividing the business.

This can be accomplished with some careful planning, corporate due diligence, and transactions like the sale-leaseback or, more in the vein of estate planning, the gift-leaseback. In that latter play, the business owner either leases or gifts the asset away and then immediately leases it back, thereby spreading ownership but retaining the operations of the company. Of course, not all business assets are well equipped for this practice, but others are perfectly positioned, especially those that deal in large equipment or vehicles.

It’s not quite as simple in practice, and diligence is a necessity, but for many small and family owned businesses this fractured structure will allow a great deal of leeway.

Whether it truly is right for you will take some thought and competent counsel at your side. In the end, it all comes down to your own unique goals, first for your business and second for your family. At Idaho Estate Planning we have the resources and expertise you need to implement the right kind of estate plan for you, your family and your business. When it comes to your family business, good planning is no accident.

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Tax Planning – Small Business, LLC, & S-Corp Owners

The end of the year is quickly coming upon us and we haven’t even had our Thanksgiving turkey. Regardless, if you’re a small business owner, it means a great deal of tax planning is needed to protect what you have earned. To that end, Businessweek has an end-of-year checklist for your consideration.

The key for the small business person to remember, especially if you’re just starting out or in the process of an expansion, is that 2011 has some special deductions for new equipment. According to the tax and jobs bill passed in 2010, small companies can deduct the full cost of equipment purchased (new or used) up to $500,000 (i.e., twice what was possible in 2010 and several times the scheduled amount of $125,000 for 2012).

Normally, the deduction is limited to the depreciated value of items over their life. However, if you do purchase more than $500,000 worth of equipment (up to $2 million), then you can use special “bonus” depreciation. There’s much that can be done with these deductions and you also might consider pushing your purchases into this year and even pre-paying them.

In general, if you’re a small business owner, then your company likely is to be rather entwined with your “personal life.” Additionally, if you are at the helm of an S-Corp or an LLC this is especially relevant and you’ll want to consider how your business finances and personal ones fit together for tax purposes. Estate planning in these situations requires experience and expertise like you’ll find at Idaho Estate Planning. Call us today to arrange for a consultation. Remember, good planning is no accident.

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