Nevada Series LLC to hold WA & IN properties

[Amy Greger]

We live in Washington State (no income tax) and own properties in Washington and Indiana. The properties are currently held in our names. Our estate planning attorney recommended setting up a Series LLC in State of Nevada to hold all WA and IN properties.

Questions:

WA State does not have Series LLC. In case of litigation, will the Nevada Series LLC provide the liability protection limited to one property? Or will WA State treat the Series LLC as a "normal" LLC?

Should we set up a Series LLC in Indiana to hold the IN properties? And separate LLCs for the WA properties?

Any concerns with rental income generated by the WA properties subject to Nevada state income tax since it's owned by a Nevada Series LLC?

[Scott Smith]

@Amy Greger from the prospective a real estate, asset protection and estate planning attorney myself I have a few recommendations and clarifications for you...we help clients nationally so I feel confidant with giving you the "full picture":

WA State does not have Series LLC. In case of litigation, will the Nevada Series LLC provide the liability protection limited to one property? Or will WA State treat the Series LLC as a "normal" LLC?

1. You can form the Series LLC in one state and use it in any state, just like any other LLC. Nevada is expensive to use, Texas is just as strong and cheaper.
2. WA should recognize the Series LLC laws form the other state. The national trend in law is that the Court will look to the "home state" of formation for the Company to determine validity and protections.

Should we set up a Series LLC in Indiana to hold the IN properties? And separate LLCs for the WA properties?

1. I recommend you set up one Series LLC and then hold the properties in the other states in individual anonymous land trusts. This would allow you one company to create and maintain. Since the land trust will hold title in the various states, the LLC does not have to be registered/have a registered agent/business address/franchise taxes/etc. in each of the states. The series LLC with anonymity trusts provides all the compartmentalization with anonymity with none of the expenses traditionally required.

Any concerns with rental income generated by the WA properties subject to Nevada state income tax since it's owned by a Nevada Series LLC?

1. If the money is flowing through the LLC then the LLC is subject to the taxes of wherever it is "doing business". So, yes.