Most people who contact me to assist in drafting LLC operating agreements for asset protection know that only multi-member LLCs have asset protection benefits for Florida residents. Many people want to know about options to add a second member to an LLC that is essentially the client’s own business or investments.
When a person has no participating partners in a business it is difficult to find the second member to their business LLC.
The answer is to use an irrevocable trust. An irrevocable trust can be a member of an LLC. Having the trust be a member makes the LLC a multi-member LLC.
In order for this to work, the client should not be the beneficiary of the irrevocable trust. However, if someone else sets up the trust, then the person can be a successor beneficiary.
One common solution is for a person to create an irrevocable trust for their children. Then, the LLC operating agreement can specify that the irrevocable children’s trust is a minority owner of the LLC. For example, a person might own 95% of their LLC with their irrevocable children’s trust owning 5%.
