Updated almost 10 years ago on . Most recent reply
LLC's and Irrevocable Trusts
An attorney told us that an LLC would be best protected if an irrevocable trust is a 10% owner of the LLC. We've decided not to retain the services of this attorney. I'm not asking for legal advice here, just your understanding of how we might want to set this up.
So, let's say we set up XYZ, llc with 45% owned by husband, 45% owned by wife, and 10% owned by irrevocable trust (with the couple's children as beneficiaries). Can they then nest ABC, llc (husband is the single owner) underneath that? So, would there be a benefit if XYZ, llc were the owner of ABC, llc? ABC, llc might lease property from the husband & wife, it might have a promissory note payable to the husband & wife, etc. ABC, llc doesn't own anything; rather, it leases everything from the husband & wife.
Then, if ABC llc is sued, could they go after the husband as the single member, or could they not, because XYZ llc owns it?
And, if the husband and wife want to sell or dispose of ABC, llc, they could do that since they own the majority of XYZ, llc, correct?