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You could just have the child be a member of the LLC with the father as the managing member. If you have the LLC taxed as a corporation, you will introduce double taxation when it comes time to take the funds out. His parents as legal guardians of the minor can place the funds that are disbursed in an account for the benefit of the minor until he reaches majority. You do not need to create a trust. The child will be taxed at the rate of the parents which may well be lower than the corporate tax rate.
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I perhaps should have mentioned that the Child in question is in fact a baby less than 1 year old. However I didnt think that was relevant anyway because I was acting under the impression - which I thought was fact, that a minor can't sign legal documents and also cannot therefore be a member of a LLC.
So now, based on your answer, you are saying that they in fact "could" (I would definetely prefer to not have a trust anyway).
I, don't want to get myself in hot water either, is it possible for you to be sure that the child could be a non-managing member. Also, then the passing income could just go into a bank account set up for the child from the LLC.
Minors can have property. They can receive it by gift, inheritance or having their legal guardian, their parents, act on their behalf to purchase the interest. Holding the membership is no different from owning stock. The child would not be the one exercising things like voting rights, the guardian would. If you have a managing member, then the child's membership is passive and he just votes on things a shareholder would vote on and the vote is made by the minor's guardian on the minor's behalf.
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