Is a Series LLC Safe?

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This past weekend I was searching the web for articles on Series LLCs and what other practitioners have to say about them. This week we’re going to be focusing on the pros and cons of the Series LLC. And like many things in life, it can be a great idea in the right circumstances and a wrong idea in the wrong circumstances.

So I was surprised to read a blog entry by an attorney who hated Series LLCs. He had a lot of concerns that might seem valid on the surface. But he was wrong. Let’s go through his points.

He starts off with a little history saying that the Series LLC first started in Delaware just 9 years ago. So, he says it’s unproven.

He then goes on to say that we don’t know how the IRS is going to treat the Series LLC for tax purposes.

When you read the article, you might get confused because at USTaxAid, we’re fans of the Series LLC, in the right circumstances. So how come I don’t talk about these problems?

There’s a clue to what is going on. The problem is that his article/blog entry is not dated. But, we can figure out when it was written because he says the Delaware law was written 9 years ago. It was passed into law in 1996, so the Series LLC actually came into law 15 years ago.

And that’s what the problem is. In the 6 years between when the first article was written and now, a lot has changed.

If you read that the Series LLC isn’t a good strategy, make sure you have current information. I love the Internet and use it for research myself. But make sure the information you’re reading is both accurate and timely. Tax law is constantly changing. Old tax news is often wrong tax news.

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