Holding LLC-Owned Real Estate in a Trust

When your ambition is to start a business, people often enthusiastically encourage you to choose the limited liability company (LLC) business structure when you incorporate.  They make it sound like an LLC is as versatile as the Thneed that brought good fortune to the Once-Ler Corporation in The Lorax, to the detriment of the natural environment.  You can own your LLC by yourself or with partners!  Other companies can partner with you in your LLC ownership!  It is even possible for an LLC to be a member of another LLC, creating an effect like the cover of Pink Floyd’s Ummagumma!  Best of all, when your company tanks, as more than half of businesses do within their first five years of operation, you can just walk away from the debts, and there is nothing the creditors can do about it!  Meanwhile, you hear less about LLCs in the world of estate planning, but they are just as useful there as they are in business.  To find out more about the potential role of LLCs in your estate plan, contact a Bronx real estate attorney.

When the Best Thing Is for Your Real Estate Properties to Belong to Anyone But You

Your heirs can inherit property from you more quickly and with less expense if your property is in the form of non-probate assets.  When assets do not go through probate, creditors cannot ask the court to make you sell these assets to satisfy debt obligations, and your heirs do not have to wait until the debt settlement process is complete before they inherit.

Trusts are a popular and versatile non-probate asset.  The media stereotype of trusts is that they are profoundly rich, interest-bearing savings accounts that pay allowances to the grantor’s spoiled descendants, but this is only one of the possible functions of a trust.  You can establish a trust with a modest amount of property, and the assets you transfer to it can also be assets other than money.  What all trusts have in common is that they are legal entities independent of their grantors and that their governing document, the trust instrument, indicates the names of the trustees who can make transactions with the trust’s property and gives instructions to the trustee about which transactions to make.

For example, a trust can own real estate properties.  A trust can also own business interests, which means that it is possible for the trust to be a member of an LLC, that is, an owner of an LLC.  Many LLCs own real estate properties, so it is possible for you to buy a real estate property, title it in the name of an LLC, and transfer ownership of the LLC to a trust.  This is one of the safest ways for your heirs to inherit real estate properties.

Schedule a Confidential Consultation With a Bronx Real Estate Attorney

A real estate lawyer can help you transfer real estate property to your heirs as seamlessly as possible.  Contact Cavallo & Cavallo in the Bronx, New York to set up a consultation.

Source:

nysenate.gov/legislation/laws/LLC