I understand a trust structure may be useful for asset protection and ongoing finance for properties in Australia. However, if I were to buy US properties (with cash, ie no finance) and hold them as a single member of a US limited liability company (LLC), is this adequate asset protection?
If I were to be personally sued in Australia, could Australian creditors go after my US property assests owned in the LLC?
If I am still at risk, is it worth setting up an Australian discretionary trust to act as a member for the LLC?Just do the research properly before setting up a single member LLC. In the eyes of the law in the US, if someone was to sue you it is unlikely that the LLC would offer sufficient protection as it may not be deemed a proper 'business'. IRS treats single entity LLCs as sole proprietorshops. This is just something I have heard online in the forums etc so look into it and suggest getting an attorney in the state you are purchasing.
Not sure on the answer to the question on protecting your US assets from an Australian creditors sorry. Most people are trying to protect their oz assets from US liability not the other way around! If the property in the US is in an LLC and that has been properly been setup your assets and liability should remain in the company.
re australian trusts, just remember that losses are trapped in the trust .
If you were to go bankrupt in Australia then all of your assets would be available to creditors – this would include overseas assets such as shares.
You probably could have your Australian discretionary trust own your overseas shares, but i am not sure what tax consequences there would be. Its a complex area and it may be easier to set up a US trust.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hello,
As stated above a single member LLC is regarded as a Sole Proprietorship for IRS tax purposes. However it does afford some protection to its single member in other areas. A Delaware LLC is a good option in that Delaware has very good laws to protect LLC's and these do apply throughout the US. Yearly fees are reasonable and you do need to pay an agent in Delaware, to be the representative for any incoming mail etc. Currently we pay $55 US a year to our agent.
Personally, we have a separate LLC entity for each property we own, its worth the money to maintain and doesnt group them all together. Hope this helps you a little.Cheers
Jean
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