Using LLCs and Trusts Together
Advanced Estate Planning Strategies for Control, Asset Protection, and Tax-Efficient Succession Planning
Jim Erwin
Principal, Erwin Law LLC
approved for 1 general CLE credit
Jim will discuss the legal and practical considerations involved in forming and administering LLCs, emphasizing how they can be used to protect assets, facilitate family business succession, centralize management of investments and real estate, and support broader estate planning objectives. He will address common drafting considerations, operational best practices, and circumstances in which LLCs may—or may not—be appropriate.
James is the founding partner of Erwin Law LLC, a Chicago firm providing legal counsel in real estate, business, and estate planning. James’ practice focuses primarily on real estate and entrepreneurial business, representing his clients in residential and commercial real estate development, investment and management as well as small to mid-size business start-up and operations guidance. A fast-growing subset of his practice is in counseling athletes in the selection, maintenance and oversight of their real estate and business investments.
James graduated from Lake Forest College in 1989 with a B.A. in Business Administration and obtained his law degree from De Paul University’s College of Law in 1992, the same year in which he was admitted to the Illinois Bar. He earned a Masters in Tax Law (LL.M.) at Chicago Kent College of Law in 1996 and was also admitted to the Bar of the United States Tax Court that year. In 1997, he was licensed to practice before the United States Supreme Court.
A member of numerous local, state and national bar associations, James is also committed to various philanthropic efforts including support and work for the Lane Tech 2nd Century Foundation, Merit School of Music and Welles Park (Chicago) Little League Baseball.
Agenda
Introduction and Roadmap; slides 1-2
Why Estate Planners Should Care About LLCs; slides 3 – 7
• The problem traditional plans leave unsolved
• How the planning toolkit has evolved
• Where LLCs fit and which clients need them
LLC Fundamentals for Estate Planners; slides 8 - 12
• Governance basics and key provisions
• Separating economic benefit from control
• Member-managed vs. manager-managed
• What an LLC does not do
The LLC + Revocable Trust Combination; slides 13 – 17
• The core structure
• Why the trust sits above the LLC
• Successor trustee vs. successor manager
• Planning for incapacity
Multi-Generational Ownership; slides 18 – 22
• Separating control from inheritance
• Passive heirs vs. active heirs
• Trusts as members
• Special considerations for trust-owned interests
Income Tax Considerations; slides 34 – 37
• Discounts vs. basis step-up
• Partnership tax issues
• Trusts as owners of taxed entities
Asset Protection Realities; slides 38 – 41
• What LLCs actually protect
• Charging orders
• Veil piercing and commingling
Privacy and High-Net-Worth Planning; slides 42 – 44
• Privacy benefits
• Delaware and Wyoming structures
• Practical limits on anonymity
Pitfalls and Best Practices; slides 45 – 48
• Common planning failures
• Practitioner checklist
• Key takeaways
Conclusion and Key Takeaways; slide 48
