All Forum Posts by: James Miller

@Maugno Mora All questions you are asking now were supposed to be asked before the marriage. The outcome of your asset protection depends on your wife right now. You need a postnup agreement. Can you make her sign that, noone here can tell. Till then everything you make shares between you two, including the profit from your flip. Moreover, when you buy and sell seceral times, it would be hard to trace the original pre marriage money. It does not matter how many times you repeat in this thread that you want to protect youself, there are only 2 solutions for this: get postnup or get divorse now.

@Greg H. if you read the response from @James Miller to my question ( and correct me if i am wrong James) he essentially agreed with me, if your spouse is not part of the llc your step up basis upon your passing is the full assessed value, but if the spouse is 50% owner then the step up basis is only 50% of the value because your spouse owns 1/2. so to say that @Karen Margrave is wrong is not correct because it depends on how you want to invest and plan for your Estate is it long term or short term. do you want your spouse to be able to claim 1/2 the profits from the LLC ?, do you claim married filing jointly or separately on your tax returns? as a spouse i would think your money is theirs and their money is yours so they would share in the profits, but if you pass do you want them to be able to claim 1/2 the step up basis or the full basis upon inheritance, what is that persons goal. there is more involved then she gets 1/2 of what i own, even in Texas.

@James Miller, @Greg H. lets take divorce out of the picture, lets say they live a good marriage but something happens to him and he passes ( sorry it's morbid, but thinking Estate wise) if she owns half of the llc ( the property) then the basis upon his death would only be raised his half of the assessed value of the property, being she owns half, would they not ? if she is not on the llc and he passes then the basis would be the full assessed value of the property, correct ? or am i thinking wrong on that ?

@Maugno Mora I have read several of the comments, in this thread. I can speak, from Personal Experience that you DO NOT want your wife owning a percentage, in any LLC or other Corporate Entity. What happens if your marriage ends, in divorce? Your wife will be entitled to equitable distribution of ALL assets acquired (WORSE CASE IS 50%), during the life of the marriage. Depending on your wife’s Skill Sets, you could hire her as an employee and issue her a 1099 at the end of the year. This would be a Business Deduction, for you, and her Income would applied to a 1040 Federal Tax Return and possibly a State Tax Return depending on whether or not your state requires such and depending on what state your Corporate Entity is registered. I hope you find this information useful, in guiding you how best to move forward.

@James Miller

With all due respect, I would agree and disagree

Say he owns a property when he gets married. He then transfer the property to a LLC. While the separate property asset has mutated it would still be considered separate property. Agree ? In the event of a divorce, barring other factors, that asset could be traced back to its original source. I see the point about the LLC itself being community property but the LLC itself is of no value without the asset. For example, if I have cash that is separate property and then use it to buy a boat, that boat is still separate property

Originally posted by @James Miller:

Originally posted by @Maugno M.:

@Dennis Dahlberg If she is added as a member, she is also an owner ?

Yes. An LLC member is analogous to a corporation shareholder.

Even if you don't add her as a member, she owns half of your LLC under TX's community property rules (assuming no pre- or post-marital agreement).

If he uses separate funds(separate property previous to marriage) this is not the case, correct ? She would be entitled to 1/2 of the increased value of the LLC's assets and profit after marriage

@Dennis Dahlberg If she is added as a member, she is also an owner ?

Originally posted by @Ronald Rohde:

Originally posted by @Andrew Syrios:

From what I've heard (from a real estate attorney), the whole series LLC thing is probably not all its made out to be. I don't believe there's much case law on it as of now. But, at the very least, I don't think they would hurt you.

In what state? What is "much"? A series LLC is failed, would be very harmful, so I consider them valid in Texas and would not advise my clients otherwise.

I'm only passing along what I heard from a real estate attorney, I'm not an attorney myself. He was not very high on them, but not being a lawyer, I tried to note this is only what I've heard from others. 

The same goes for Florida. See  Title XXXVI Business Organization FL 605.04093. 

The interesting thing about FL is the State Legislature just recently took a vote to not add a Series LLC as an option in FL. BUT, the reason for it is that they did not think that the small business owners were "competent enough to use them yet." So, I see within the next election cycles this will be revisted and we will soon see FL as being another state competing for Series LLC business.

Though Florida does not have a statutory Series LLC to create in the state, it does recognize the internal liability shield offered by LLCs on its members.

So, though Florida does not have a Series LLC, the State of Florida does recognize the internal liability shield principle, and that is what the courts would be looking at if you created an out of State Series LLC lets say in TX or NV or DE, or any of the 13 states, and owned a property in FL and were sued in FL. The personal liability shield of the Series LLC would still be upheld so long as its formalities were followed. Just like a standard LLC.

Originally posted by @James Miller:

Originally posted by @Cody L.:

Originally posted by @James Miller:

Originally posted by @Cody L.:

Just do your LLC on your own. I've done it 1000000000000 times. It takes 10 min (okay, 20 min the first time). Same with an IRS EIN. That takes maybe 3 or 4 minutes. EIN is free, the LLC costs $300 (state fee). No reason to pay an attorney. It will literally take you less time to do it yourself then to ask here how to do it and the time to then call attorneys.

I can't speak for California entities, but in TX, filing an LLC using the state-provided forms provides the bare minimum protections. There's a lot more a competent lawyer can do in LLC formations.

I can't speak for California entities either.   I've done only Texas ones, which is what I was referring to.

Those services that get your LLC don't do your operating agreement or anything like that. They simply file with the SoS and get your cert of formation/filing.

Because I don't know what I don't know -- can you specifically tell me what a competent lawyer does in regards to filing an LLC with SoS that gives you more protections (and what more protections entails)?

 1) Customized strong certificate of formation that does more than the state form, 2) Customized strong operating agreement, and 3) protections available vary on taxation choice of entity, so this needs to be handled pre-filing. 

Yeah, I have my op agreement that my attorney helped and I've done 'fill in the blank' with my new LLC name since. But in terms of the cert of formation, I didn't realize there was a 'different' way. My attorney told me to just do that and he'd do my op agreement (this was back when I was doing my first one). I've done them ever since and I've honestly done 30+.