The Decanting Clause: A Vital Provision Every LLC Needs for Maximum Protection

Discover how incorporating a Decanting Clause can enhance the flexibility, security, and longevity of your LLC.

 

Asset Protection Planning

Do you have an LLC? Are you looking to set one up? 

Well, if you have set up an LLC, you did so for asset protection. To further protect those assets, we strongly recommend a clause in your LLC that allows you to decant. This practice permits you the flexibility of asset transfer to another jurisdiction. A decanting clause is especially valuable when you or your corporation are under attack. In case you are curious, decanting clauses are widespread in asset protection planning.

 

Decanting Your LLC

Trust or LLC decanting permits a trustee to modify a trust. They are figuratively pouring the trust assets into a new one with more favorable terms or in a different state.

Decanting can be a great way to add flexibility to irrevocable trusts held in LLCs.

 

Benefits of a Decanting Clause

You’ll love how decanting allows for correcting pesky clerical errors and other administrative changes. Also, the ability to change the number and powers of trustees or consolidate trusts can come in handy. You can even use it to change how trust assets are distributed, like enhanced asset protection or qualifying a special needs beneficiary for needs-based benefits. Trust decanting can be a powerful tool if you proceed with care.

 

A Case Study

A decanting clause allows you to do something like this example. Suppose somebody’s coming after your LLC in California, or they are coming after you individually. With the proper decanting clause in that LLC, you can pick that thing up and reorganize it in another state, and they can’t stop you from doing it and say it’s a fraudulent move or transfer because you’ve already built that into your LLC operating agreement.

These provisions are essential when setting up LLCs. Decanting is just another critical provision for asset protection in your LLC agreements. It improves the flavor of your business!

To learn more about the power of Decanting Clauses and other critical clauses in your LLC operating agreement and to discover different ways to boost your portfolio, you can schedule a complimentary 45-minute Strategy Session with a seasoned Anderson Advisor and get your free blueprint to invest for success.

Free Strategy Session with an Anderson Advisor

To learn more about a decanting clause and other essential provisions when setting up your LLC, schedule a free 45-minute Strategy Session. You’ll discover how to ensure your assets and property are protected.