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jbrlaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 269
Experience:  Creditors' rights lawyer involving collections, foreclosures and bankruptcies for almost 19 years.
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If I disclaim to my children and place the assets in an LLC ...

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If I disclaim to my children and place the assets in an LLC my attorney says this will protect the assests. I will be the controlling partner of the LLC and interest will pay into the LLC but each owner will need to declare the interest as income on a tax return. My question is since this is a protected asset if a person ever needed to declare personal bankruptcy would this prevent a person from doing so.
No. It is trated like any investment. The asset will be assigned a value and, particularly if the banrupt individual is a minority interest owner, the LLC should be unaffected for the most part. Depending on the type of bankruptcy, the person MAY have to liquidate his or her interest in the LLC.

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