Ordinarily, I leave this area of the law to the my partner, Susan Rayl, but today (well, yesterday by the time I’m writing this) the Indiana Supreme Court issued a decision, written by Justice Stephen David, that caught my attention. In Bond v. State, the Court held that the defendant’s confession was involuntary, and therefore inadmissible as evidence against him, because it was obtained through interrogation by a police officer who told the defendant, an African American from Gary, Indiana, that his race would prevent him from getting an impartial jury or a fair trial.

The officer’s interrogation strategy was to persuade the defendant that the police knew he was guilty and that the only way he could improve his situation was to confess. Over a period of three hours, the officer suggested that the defendant might be charged with a less serious crime if he confessed and told the defendant that a confession would allow him to see his children and talk to his mother. Then, about two hours into the interrogation, the officer told the defendant:

[d]on’t let twelve people who are from Schererville, Crown Point–white people, Hispanic people, other people that aren’t from Gary, from your part of the hood–judge you. Because they’re not gonna put people on there who are from your neck of the woods. You know that. They’re not gonna be the ones to decide what happens to you. You know that. I know that. Everybody knows that. All they’re gonna see is, oh, look at this, another young motherf***** who didn’t give a f***.

Earlier this year the Indiana General Assembly passed House Enrolled Act 1394, which takes effect today, July 1, and makes several amendments to the Indiana LLC statute, officially known as the Indiana Business Flexibility Act. This is the first of two articles discussing those changes. This first article addresses some amendments that should enhance the use of LLCs for estate planning purposes, and the second will discuss changes that expressly address the use of officers in the management of limited liability companies.

Permissible Purposes for LLCs

With the new amendments, Section 6 of the Indiana Business Flexibility Act now explicitly states that LLCs may be used not only for business purposes but also for personal and nonprofit purposes. For an example of a personal purpose, a married couple who own a vacation cabin and want it to remain in the family after they are gone might place the cabin in a limited liability company and then, by gift, by will, or by other means, transfer the ownership of the LLC to their children or grandchildren. Because the cabin is not used to generate income, the purpose of the LLC is personal, not business.

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