Saint Petersburg, FL asked in Business Law, Estate Planning and Tax Law for Florida

Q: Can a Florida LLC owned by a Defined Benefit Plan have more than one member?

I have a Defined benefit plan which is the owner of one of my LLC's. I used to be the only member of the LLC. The Managing Member as Trustee/Custodian of the DBP. I recently added my wife and Son as authorized members because I was told that Single Member LLCs in Florida are vulnerable. However, I have also read that LLC funded by retirement plans could not have other members associated with it. Could you please advise?

2 Lawyer Answers
Mark Siegel
Mark Siegel
Answered
  • Estate Planning Lawyer
  • Sarasota, FL
  • Licensed in Florida

A: You raise several issues. First, with other members added to the LLC, the allocation of defined benefit plan contributions has .changes (not in your favor). Single member LLC are disregarded entities for IRS purposes (a good thing). However, if a judgment is entered against a single member LLC, it is not entitled to be treated as a charging order, which would apply to a multi-member LLC.

You should consult with a business attorney.

Andy Wayne Williamson
Andy Wayne Williamson
Answered
  • Estate Planning Lawyer
  • MIramar Beach, FL
  • Licensed in Florida

A: I agree with Attorney Siegel. You really need to get legal advice on a topic like this.

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.