Series LLCs and Asset Protection: Will a Model Uniform Act Clear the Fog?
By: Jennifer Villier, JD
We have all heard the common expression: “you get what you pay for.” Touted by some as a low cost asset protection strategy, series LLCs have gained increasing popularity over the past several years. Yet there are some significant concerns about the use of series LLCs, including uncertainty with respect to tax, bankruptcy, and choice of law issues. Unlike limited liability companies, series LLCs are far from having achieved uniform recognition across the U.S. To that end, the National Conference of Commissioners on Uniform State Laws (“NCCUSL”) drafting committee has been working on a uniform law for series LLCs. The drafters’ comments, however, leave open questions regarding whether such statute will ever be finalized. This article discusses these and other issues pertaining to the use of series LLCs in an asset protection plan, and ultimately cautions practitioners against the use of such entities until the unknowns are resolved.
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