That&#x27;s not true. The estate would be taxed at 40% for any value of the LLC over about $10.5 million (today&#x27;s estate-tax exemption).<p>Family LLCs can work for reducing the estate tax if you transfer ownership interests during your lifetime at a reduced valuation, owing to the fact that the membership interests are not marketable, giving them a lower value than the market value of whatever the LLC holds.<p>The only way you avoid the estate tax is if you transfer an asset to an irrevocable trust or your family members before the asset gains significant value. If you own, directly or indirectly, an asset that has significant value, it is taxed at death.