Nevada is one of just a few states in the U.S. that currently allows a strange creature known as a Series LLC.  A Series LLC is a statute-permissible division of one state-law limited liability company into subsidiaries, “cells” or “series;” each of which is a separate LLC for state law purposes.  This was added to Nevada law in 2005.  Nevada law states that the assets, liabilities, debts and obligations of each series are separate and apart from each other series.  The requirements for this separate treatment are: 1) each series must maintain separate and distinct records; and  2)the assets of the series are held (even indirectly through a nominee) separately from the other series; and 3)the articles of organization comply with the statute.  These requirements are really no more burdensome than if a person maintained more than one traditional LLC.

The articles of organization in Nevada provide a simple check-box to select a new LLC as a Series LLC.  It is also possible to amend the articles and select Series LLC treatment.  The biggest requirement, from our experience, seems to be the operating agreements.  We typically prepare an operating agreement for the “container” which would match the name of the LLC formed with the Nevada Secretary of State.  And then we create operating agreements for each series or cell in addition.

Some possible applications for a series LLC are: rental properties; property development; multiple franchises; taxicab companies; rental car companies; trucking companies; commercial property leasing, etc.

PROS:  The biggest advantage for most seems to be price.  Because you can have several LLC’s for the maintenance cost of one LLC (Secretary of State fees apply only to the container).  Easy expansion: adding a new series requires only an amendment to the container operating agreement and the drafting of a new operating agreement for the new series.

CONS: Business operations out of state: since the series LLC is a new concept, non-series states are unfamiliar with the concept and becoming eligible to conduct business outside of Nevada’s borders has proven difficult.  Since the LLC is rather new and unproven in case law, there may be a question of its efficacy.  But we have confidence that the series LLC should work well for Nevada residents that keep their business operations contained to Nevada.

Please contact our office for help with the creation of your series LLC.  The attached diagram shows a typical setup where the series are all part of the same LLC (represented by the cloud).

Please join us for National Healthcare Decisions Day Kickoff Reception
Thursday April 10, 2014
5:00 pm - 7:00 pm
Palm Mortuary
1600 South Jones Blvd.
Las Vegas, NV 89146

Pleas join us for a FREE lunch and learn
"Don't be Scared, be Prepared"
Wed April 30, 2014
12:00pm  - 1:30pm
H2U Mountain View office
3150 N Tenaya Way #114

Please call 702-233-5474 to register.

Leaving an estate plan can provide peace of mind that a person's wishes will be respected and carried out when they are no longer around to care for and provide for their loved ones.  Indeed, many estate plans are implemented just as flawlessly as the person who created it intended.  There are, however, no shortage of estate plans that become tied up in lengthy and costly litigation as a result of will or trust contest actions alleging that the testator either did not have capacity to execute the estate plan or was unduly influenced by another person in making the estate plan.  In these instances, the challenges have historically been made after the testator has already passed away.  This is due to the fact that the laws of most states employ purely post-death probate procedures, which only allow the testator's mental capacity to be considered after death.  The inherent flaw then becomes that the person best suited to confirm his or her testamentary wishes is no longer alive to consult about it.

North Dakota, Ohio, Arkansas and Alaska have enacted pre-death or “ante-mortem” probate laws that authorize some form of lifetime will validation. These laws permit testators to proactively seek a court declaration as to the validity of their wills during their lifetimes, thereby reducing the likelihood of a will contest after their death.  With the exception of Alaska these laws have been in existence for some time, having had the most frequent use in Ohio while getting little to no use in North Dakota and Arkansas.  Alaska sparked a reemergence of interest in pre-death probate legislation in 2010 when it adopted a broader version of the ante-mortem probate statute.  In addition to wills, the Alaska statute authorizes the court to declare the validity of trusts during the lifetime of the trustor.  The validation proceedings may either be initiated by the testator or any interested person with the testator’s consent.  Incidentally, Alaska will entertain pre-death probate proceedings even when the testator resides in another state or has no connection to Alaska.  In 2011, the Nevada legislature considered similar ante-mortem probate legislature, but it failed to pass.

Whether Nevada and the other currently “post-mortem” probate states will ultimately enact pre-death probate legislation remains to be seen.  In such states, there continue to be a range of methods that may be invoked when setting up the estate plan to lessen the potential for a will or trust contest later.  Included in these methods are: self-proving wills, no-contest or "in terrorem" clauses, and videotaped execution ceremonies, to name a few.   Individuals who are concerned that a will or trust contest might interfere with his or her carefully crafted estate plan should speak candidly to the attorney about the options available to safeguard it from unwanted attacks.

-Attorney Kari L. Stephens

Firm representative, Sandy Simpson presenting The Veterans Foundation with a check.