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A Guide to the Family Limited Liability Company for Estate Planning

  • Parkview Partners Capital Management
  • Oct 1
  • 2 min read

Managing wealth across generations can be complex. A Family Limited Liability Company (FLLC) is a legal structure that consolidates family assets, can help preserve them from certain liabilities, and allows for potentially tax-efficient wealth transfers.


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What Is a Family Limited Liability Company (FLLC)?


An FLLC acts like a private holding company for family assets. Members may contribute real estate, investment portfolios, or a family business into the entity. In exchange, they receive ownership interests.


Benefits include:


  • Safeguard assets from personal creditors

  • Centralized management across generations

  • Opportunities for estate and gift tax efficiency


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Governance and Roles


The structure often separates management from ownership:


  • Managing Members – typically senior family members who make decisions about investments and distributions.

  • Non-Managing Members – often younger generations who hold ownership but no control, learning stewardship under guidance.


This separation allows senior members to retain control while gradually transferring value to heirs.


Tax and Estate Planning Advantages


One of the unique features of an FLLC is the ability to apply valuation discounts when gifting ownership interests. Discounts may be applied for:


  • Minority interest (lack of control)

  • Lack of marketability (hard to sell shares)


These tools can help reduce the taxable value of gifts, creating potential estate tax savings.


Formation Process


Establishing an FLLC involves:


  1. Choosing a compliant name and registered agent

  2. Filing Articles of Organization with the state

  3. Drafting an Operating Agreement to govern decision-making, ownership, and succession


The operating agreement functions like a financial constitution, preventing disputes by setting rules upfront.


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Governance for the Long Term


Strong governance can help ensure the FLLC serves its purpose for decades. Key elements include:


  • Decision-Making Rules: defining when majority, supermajority, or unanimous votes are required

  • Buy-Sell Agreements: setting terms for ownership changes after events like death, divorce, or disability


These frameworks protect both the business and family harmony.


Final Thoughts


A Family Limited Liability Company can be a cornerstone of multi-generational wealth management. By combining protection, control, and tax planning, it helps preserve family assets and values across generations. However, forming and maintaining one requires professional guidance.



Disclosure:


Investment advice offered through Stratos Wealth Partners, Ltd., a registered investment advisor. Stratos Wealth Advisors, LLC and Parkview Partners Capital Management are separate entities. This article is for informational purposes only and is not intended as investment, legal, or tax advice. Please consult with your professional advisors before taking any action. Past performance is not a guarantee of future results. To discuss how these strategies might apply to your specific situation, contact Parkview Partners Capital Management for a personalized consultation.


 
 
 

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Financial Advisor, Investment Advisor, High Net Worth, Wealth Management, Tax Planning, Risk Management, Financial Coordination, Retirement Planning, Charitable Giving, Columbus Ohio, Parkview Partners Capital Management

291 East Livingston Ave.
Columbus, OH 43215


Phone: (614) 427-2132

Fax: (614) 427-2132

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