[WSBAPT] Ownership of home In LLC?

[John Creahan]

Do you have a citation regarding the charging order?
I have not focused on this issue, but, as Heather said, I don’t see how transferring the house to an LLC would provide any protection against debts incurred by his sole-proprietor business.
I would strongly recommend that he transfer the business operations to one or more business entities (an LLC or corporation) for a number of reasons, including potentially limiting his exposure to business debts.
My $.02.
John

John Creahan
john at cairn-law.com<mailto:john at cairn-law.com>
1325 4th Ave., Suite 940
Seattle, WA 98101
206-621-5848
www.cairn-law.com<http://www.cairn-law.com/>
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From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of John J. Sullivan
Sent: Thursday, December 8, 2016 10:44 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Ownership of home In LLC?

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<mailto: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<mailto:heatherd at westseattlelaw.com>
www.westseattlelaw.com<http://www.westseattlelaw.com/>

Click here to connect with de Vrieze | Carney on Facebook:   <image002.png><https://www.facebook.com/DeVriezeCarney>

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From: wsbapt-bounces at lists.wsbarppt.com<mailto: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<mailto: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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