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LLC vs Trust
Monica Gragg
Created on May 13, 2023
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LLC vs. Trust
Select each for key information about LLCs and Trusts
Trusts
LLC
Most are 100% private and don’t usually require filing any public paperwork.
Public record; personal information could be available to potential litigators and the public
Privacy
Only an irrevocable trust (a trust that cannot be modified, amended, or terminated without the permission of the grantor's beneficiary) protects assets from creditors. Once assets become the personal property of beneficiaries, they are at risk.
Protects assets from personal liabilities and creditors.
Asset Protection
Tend to be cheaper to create and most won’t require any ongoing maintenance fees.
Need to pay state’s filing fee. Most states also require filing annual or biennial reports with the Secretary of State that typically require a fee.
Costs
Assets are usually exempt from probate, but any assets outside the trust will likely be subject to probate, even if you put them in a will.
Can avoid probate by making specific provisions in the operating agreement,outlining the rules of the business.