[WSBAPT] Ownership of home In LLC?

[John J. Sullivan]

Theoretically if there is a judgment against H&W the creditor could only obtain a charging order for distributions from the LLC, if any, and could not execute against the house itself (in the absence of fraud, etc.). 

Remember in CP states the LLC can be a disregarded entity for income tax purposes if only H&W are members. 

https://www.irs.gov/businesses/small-businesses-self-employed/single-member-limited-liability-companies

Does a single member LLC enjoy protection from creditors in WA? It doesn't in every state. For that purpose is a CP LLC owned solely by H&W considered "single member?"

John Sullivan

Sent from my iPhone

> On Dec 8, 2016, at 9:32 AM, Heather deVrieze <heatherd at westseattlelaw.com> wrote:
> 
> Someone can correct me if I am missing something, but it doesn’t seem like there is any realistic benefit to putting one’s personal residence in an LLC solely owned by H&W as protection from business liability owned solely by H&W. I have always understood that any protection of an LLC is protecting assets outside of LLC (personal assets) from liability inside LLC (business assets) except where personal liability is found. Am I missing something?
>  
> Heather
>  
> Heather S. de Vrieze
> Attorney-at-Law
> <image001.jpg>
> 3909 California Avenue SW
> Seattle, WA 98116-3705                         
> (206)938-5500
> heatherd at westseattlelaw.com
> www.westseattlelaw.com
>  
> Click here to connect with de Vrieze | Carney on Facebook:   <image002.png>
>  
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> From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Josh Grant
> Sent: Wednesday, December 07, 2016 3:26 PM
> To: wsbar trust <wsbapt at lists.wsbarppt.com>
> Subject: [WSBAPT] Ownership of home In LLC?
>  
> I have a client who has a large business, fully insured, however the activity has a potential for substantial liability (environmental, accidents to workers).  It is owned as a sole proprietor by client with his wife.
>  
> He and his wife owns some real property including a family home.
>  
> It would be difficult to transfer everything in the business into an LLC. because of the nature of the assets.  Same with transferring everything into a Corporation.   Also he may sell the business in a year or so.
>  
> He is hoping for some reduction in risk exposure to his  nonbusiness assets.
>  
> I have told him that their isn’t  a lot of protection available, however, an LLC might be helpful (create a small barrier) for a business related claim, if for some reason he doesn’t have enough insurance.
>  
> Is there a problem if he puts the real property he and she owns in an LLC?  Would it provide any protection to their assets? Other suggestions?
>  
> Josh Grant
>  
> Joshua F. Grant, PS
> Attorney at Law
> P. O. Box 619
> Wilbur, WA 99185
> tel 509 647 5578
> fax 509 647 2734
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