My CPA suggested that I create an LLC to shelter my self employment income from taxes. I intend to file for divorce before December 31, 2015. Would my spouse have an ownership interest in the LLC or any future income from it? Should I wait until my divorce is filed and/or finalized before creating an LLC? Will the LLC be community/marital property?
As an initial matter, it is not entirely clear why a CPA would recommend using a single-member LLC as a means “to shelter . . . self employment . . . income from taxes.” But that's a different issue.
Regarding division of property upon divorce, an asset (or debt) is either marital (community) property or it is not. For example, if a married person uses $100 of community property cash to purchase 100 widgets, the married person now has 100 community property widgets instead of $100 in community property cash. Although the nature of the asset – cash-to-widgets – has changed, the character of the asset – community property – has not changed.
Because the general focus of your concern seems to be taxes, with the marital property issue merely being a means to an end, it is not clear why you want to file your divorce papers before December 31. Tax filing status is determined by your status on Dec 31. Filing for divorce does not, in and of itself, change your marital status.
You might do well to at least consult with an attorney (preferably one who will not try to sell you an LLC that you don’t need) before you do anything that might (probably will) cost you more than the fee for a consultation.
For more information on this topic, click here to: Contact Lapin Law Offices
Lapin Law Offices, P.C.
5001 Spring Valley Road, Suite 400 East
Post Office Box 802401
Dallas, Texas 75380
Disclaimer: The information contained in this publication is provided by Lapin Law Offices, P.C., for informational purposes only and, shall not constitute legal advice or create an attorney-client relationship. The laws and interpretation of laws discussed herein may not accurately reflect the law in the reader’s jurisdiction. Do not rely on the information contained in this publication for any purpose. If you have a specific legal question, please consult with an attorney in your jurisdiction who is competent to assist you.