okay just bought my first duplex—i know i “should” put in LLC than land trust. Also about to do the same with my home. Not to be a dead horse—but why not just put my home/investment property directly into a landtrust. I will try SO HARD to make this simple ----i not sure why —i can’t completely grasp. Except for the fact that it is important to do. Anyone out there patient enough —to try one more time. Thanks!!!
who is the beneficiary of the trust? you? then you haven’t accomplished anything since you still beneficially “own” the property. If you are sued and lose, they can’t attach the home directly as it is technically owned by the trustee, but what happens when you decide to sell and move? You remove the property from the trust and BANG, they slap a judgement against it.
But if you put your residence in a trust with the LLC as beneficiary, the LLC beneficially “owns” the house. They can’t get to the house through you - you don’t own it. They can’t get to the LLC through you, it’s personal property. The LLC takes possession, sells it, whatever, with no recourse to the creditor.
Mark,
Would the Trust/LLC Beneficiary also eliminate the need to register a foreign LLC if the property is out of state?
If the rental property is titled directly to an out of state LLC, the LLC would have to register in the state where the property is located as a foreign corporation. Would holding title in a trust with the LLC as beneficiary avoid the foreign corporation registration requirement?
I am in this situation now, just want your input before I talk with trust and estate attorney next week.
Would holding title in a trust with the LLC as beneficiary avoid the foreign corporation registration requirement? Probably not.
Ideally there would exist a bonafide business relationship for the LLC. ie: you would pay rent to the LLC to establish it as a “real” business.