Need advice with Setting up LLC
Hi BP Community,
I just walked out of an attorneys office with regards to estate planning and setting up a living trust, and included in our discussion was setting up an LLC for my real estate property. Based on my current family situation it was recommended that I setup 3 LLC's. In addition to the cost of the trust, the cost of setting up an LLC was quoted at $1,800 each. Can anyone here give me any suggestions on options for setting up an LLC, what I should expect to pay, where I can go, and what type of LLC I should setup? Your comments are greatly appreciated.
Their site is offline right now, but check the Texas Secretary of State's web site for the cost of setting up an LLC. Its good to consult an attorney on how to organize your assets and entites, but $1800 per LLC seems highly excessive. I suspect you're paying a lot for someone from their firm to log into the website and file the papers.
I believe series LLCs are legal in TX so we need more clarity or is there going to be 3 separate LLCs? Also does the price include obtaining the Articles of Organization and/or Operating Agreement? A lot of hours can go into setting up a OA with respect to a trust, planning, probate, members interest, contracts, etc where an attorney is needed that has some experience in court with that LLC structure. A lot of what I would pay one for would be based on asset protection based on LLC cases they won. Me personally, would want to read the case, then I decide what I thought the attorney was worth. LLCs are fairly new so you have to be careful here with attorneys that have great ideas, charge for them, but have never been in court with them. Great thing about LLCs is they are flexable with less rules than other legal structures, that may or not be a good thing in court and choosing the right attorney.
I don't know about Texas but that seem like an outrageous amount to set up an LLC. $1,800 to have him draft an operating agreement and then meet with you for a few hours explain the operating agreement and explain how to run it, that might be worth it. My guess is since he is charging that much per LLC, that is not what you are getting.
I paid $1,000 to have my first LLC created by an attorney. He created an operating agreement that I didn't understand. We had a meeting for him to help me understand it. He said "It is just boilerplate." It was clear he didn't understand it any better than I did.
I realize now that there were questions he should have asked me in deciding how to structure the Operating Agreement. He didn't ask those questions and he gave no guidance on the pitfalls or how to operate the company. If someone is charging me $200 to create an LLC that is what I would expect. When someone is charging top dollar they should be providing more.
I recomemnd the books on LLCs and other entities by NOLO Press. This will give you a basic legal understanding of what you are doing. You can then do as I do and create your own LLCs or you can work with a professional and get a better end result becuase you are more educated.
Good luck - Ned
Don't know about Texas but $500 for a good attorney to draft an LLC sounds more like it.
Thank you all for your input. @ Terry, yes I believe part of the fees were based on providing an iron clad asset protection plan in place which would flow right into or in conjunction with the estate planning.
@ Ned, he was kind enough to provide me with an estate plannig book which he authored which goes through estate planning from A through Z in questionnaire format. At this point, I am in research mode attempting to educate myself about LLC's to determine what would be best. And yes, with the attempt of receiving the best value for my dollar, and I emphasize value.
Thank you all once again.