June 14, 2011

Making Sure Your Assets Are Still Protected

The GOOD NEWS:
New Bill Assures Continued Favorable Asset Protection Treatment  for  Multiple Member  LLC’s.

Last summer we wrote to you regarding a Florida supreme court ruling that resulted in doubts about the ability of single member LLC’S to effectively protect your assets from creditors and we recommended alternatives to ensure continued protection of your assets.

The Florida Bill that just passed specifically addresses the ambiguities resulting from last year’s court decision and now makes clear the distinctions between single and multiple-member LLC's.

  • Single-Member LLC  - A court may order a foreclosure sale of the membership interest where a creditor shows that distributions under the charging order will not satisfy the judgment within a reasonable time.
  • Multiple-Member LLC- The membership interest foreclosure remedy is NOT available to a creditor.

What Can You Do To Protect Single-Member LLC Assets From Creditors?

In light of the dramatic weakening in the asset protection offered by single member LLCs, as a result of the court decision and the recent legislation, we highly recommend that all those with single member LLCs schedule a meeting with your attorney  as soon as possible  to review alternative options such as:

  • Adding an additional member to your LLC’s and drafting a new operating agreement

  • Converting the single member LLC to a Limited or General partnership
 Please call us at 305-931-3200 with any questions or to schedule an appointment.

Until next time,

Austin A. Frye, MBA, JD, CFP®

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Legal services provided by the Law Offices of Frye & Vazquez, P.L. are separate and independent of services offered by Frye Financial Center. Additionally, the Law Offices of Frye & Vazquez, P.L. and the legal services offered are not affiliated with nor endorsed by LPL Financial.
 
20900 West Dixie Highway
Aventura, FL 33180
Phone: 305-931-3200 / 800-535-0187
Fax: 305-931-9383