Editor’s note: This is part 14 of an ongoing series about using trusts and LLCs in estate planning, asset protection and tax planning. The effectiveness of these powerful tools — especially for asset protection and tax planning — depends very much on how they are configured to work together and whether certain types of control over assets and property are surrendered by the property owner. See below for links to the other articles in the series.
Even though the owner of a limited liability company (LLC) is generally protected from a lawsuit originating from inside of an LLC — the legal disaster cannot usually harm the LLC owner, as I wrote about in my previous article, Limited Liability Companies (LLCs): How Assets Are Protected — the LLC itself is not protected from a lawsuit originating from outside of the LLC, or against the LLC owner personally.
