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Losavio & DeJean, LLC – Baton Rouge’s Trusted LLC Formation & Asset Protection Attorneys

Limited Liability Companies (LLCs)

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Limited liability companies (LLCs) are one of the most versatile and powerful business structures available to entrepreneurs, investors, and families looking to protect and grow their assets. While they are often used to start new businesses, their usefulness extends far beyond that, into sophisticated estate planning and asset protection. This hybrid entity combines the liability protection of a corporation with the flexibility and tax benefits of a partnership, making it ideal for a variety of financial goals. A key aspect of this versatility is its tax treatment. LLCs can be taxed as S-corporations, C-corporations, partnerships, or sole proprietorships (disregarded entities), allowing owners – known as members – to choose the best option for their income, growth, and distribution plans.

Choosing the right legal entity is not a simple matter of checking a box. It is a strategic decision that has significant long-term consequences for liability exposure, tax efficiency, and succession planning. There are several types of legal entities available, including LLCs, corporations, limited partnerships, and trusts. Each has its own unique advantages, disadvantages, and complexities. For example, a C-corporation offers strong liability protection and access to capital markets, but income may be subject to double taxation. On the other hand, a general partnership is simple to set up, but each partner has unlimited personal liability for partnership debts. Navigating the options requires understanding your assets, risk tolerance, and long-term vision. It’s important to consider all factors before making a decision.

There are various legal structures available to protect and preserve your wealth. Our team can advise you on the different options and help you understand the advantages and disadvantages of each one. We go beyond textbook definitions when analyzing your situation. We consider factors such as the type of assets you own (e.g., rental property, a family business, investment portfolio), your family situation, your location, and your future plans for income distribution and management. This comprehensive assessment ensures that the chosen structure works not in isolation but as part of your overall financial plan. Once you have decided on the best structure for your needs, we will help you prepare the necessary documents to achieve your goals and ensure compliance from the start.

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The Strategic Role of LLCs in Estate and Asset Protection

For example, limited liability companies (LLCs) can be a useful tool for estate planning and asset protection. When structured as a family LLC, it becomes a vehicle for consolidating and managing wealth across generations. Parents and grandparents can contribute assets such as real estate, securities, and intellectual property to the LLC, pooling them under one professionally managed entity.

The LLC provides centralized management of these assets, allowing the donor to maintain control and protect them from creditors. Because the LLC is a separate legal entity, creditors of an individual member cannot directly seize its assets, but can only seek a “charging order” against the financial interest of the member, which may limit their ability to access future distributions. This creates a significant barrier to transferring personal liabilities to family wealth.

Furthermore, the family limited liability company (LLC) can facilitate gift giving to children, grandchildren and other beneficiaries. By gradually transferring non-controlling units over time, senior citizens can transfer wealth while taking advantage of annual tax exclusions and lifetime tax exemptions. These gifted units are often valued at a discount due to lack of control and marketability, which means that you can transfer more value from your assets using less of your exemption. The family LLC is an efficient tool for reducing federal and state taxes on estates and ensuring that more wealth passes to heirs rather than the government.

How We Can Help

At Losavio & DeJean, LLC, we understand that strategic business and tax planning can benefit anyone, from entrepreneurs just starting out to multi-generational families seeking to preserve their legacy. We believe in demystifying wealth preservation and asset protection for our clients. Our approach is collaborative and educational, taking the time to explain not only the “what”, but also the “why” behind each recommendation. This empowers our clients to make informed decisions with confidence.

Our attorneys work closely with financial advisors, accountants, investment managers, and other professionals who manage your estate, ensuring that your assets are structured in the best way possible. This team-based approach is crucial to avoid costly mistakes, such as tax strategies that conflict with your estate plan or investments that jeopardize your liability protection.

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We Uncover All of Your Asset Protection Options

Since 1976, Losavio & DeJean, LLC has helped clients secure and stabilize their estates for future generations. Our decades of experience and specialized knowledge can be put to work for you. We have a forward-thinking approach that allows us to design plans that not only comply with current laws but also have the flexibility to adapt as your life, family, and legal landscape changes.

In addition to entity formation, business planning, and tax planning, there are several other methods to protect your wealth and estate. A comprehensive asset protection strategy can be compared to a layered defense, with LLCs forming one crucial layer but strengthened by others. Placing LLC membership in a properly drafted trust adds another level of insulation and control, controlling how assets are managed and distributed over generations. Our asset protection lawyers in Baton Rouge can assist you with all aspects of wealth preservation, such as Alaska dynasty trusts, asset protection trusts with spendthrift provisions, family limited partnerships, LLCs, residency trusts, QTIPs, and charitable trusts. We specialize in customizing these sophisticated instruments to fit the unique contours of the Louisiana legal system, ensuring their execution with precision to withstand potential legal challenges.

Our firm has an excellent reputation in the community. We provide every client with detail-oriented legal services that emanate from an ethical and informed understanding of the law.

Common LLC Creation FAQs

How can an LLC be used as an estate planning tool?

A Family Limited Liability Company (FLLC) is a powerful vehicle for managing and transferring wealth. It allows you to consolidate family assets (like real estate or investments) under centralized management, typically retaining control as the manager. You can then gradually gift membership interests (small, non-controlling shares) to children or trusts, removing those assets from your taxable estate while maintaining oversight and often qualifying for valuation discounts.

What is the primary asset protection benefit of an LLC?

An LLC creates a legal separation between your personal assets and the assets held within the company. This “limited liability” shield protects your personal wealth (home, savings) from business-related creditors, lawsuits, or debts of the LLC. Similarly, when used for holding family assets, it can protect those assets from the personal creditors of individual family members who are owners.

What’s the difference between an LLC and an Asset Protection Trust?

They are distinct but complementary tools. An LLC is a business entity that holds specific assets and provides liability protection from operational risks. An Asset Protection Trust (often domestic or offshore) is designed to hold your personal wealth as a separate legal entity, protecting it from future personal creditors and lawsuits. Our attorneys can advise on using one or both as part of a layered protection strategy.

Do I need an LLC if my business is already a sole proprietorship?

Yes, if you seek liability protection. A sole proprietorship offers no legal separation between you and your business. If your business is sued, your personal assets are directly at risk. Forming an LLC is a fundamental step to shield your personal wealth. It also lends credibility, offers tax flexibility, and provides a clearer structure for ownership and management, especially if you plan to bring in partners or pass the business to heirs.

How do you coordinate with my other advisors (CPA, financial planner)?

We work as part of your advisory team. Your CPA provides crucial input on the tax implications (e.g., choosing S-Corp vs. partnership taxation for the LLC). Your financial planner understands your overall wealth goals. We integrate this advice to ensure the legal structure we create—whether an LLC, trust, or partnership—aligns with your tax strategy and financial plan, creating a cohesive and effective wealth preservation strategy.

Is an LLC only for business owners, or can it benefit individuals/families?

It is highly beneficial for individuals and families. An LLC is an excellent way to hold and manage family investments, rental properties, or farmland. It facilitates organized management, clear distribution of income, and structured gifting to heirs. For high-net-worth individuals, it is a key component in a broader asset protection plan, compartmentalizing different asset types to limit liability exposure across your entire portfolio.

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