LLC Or Trust On Title
I am trying to determine should I put a Trust on Title of all of my properties and make my LLC the beneficiary ? OR
Should I put the LLC on title and have the trust in place of my interests within the LLC....With me being the beneficiary of the Trust
I have talked to 3 different lawyers and received three different answers...
Any suggestions ?
Same here. I too am getting different answers. I really would like the answer to this one. Which structure would be best for asset protection? Maybe we should start a poll on the above.[ Edited by aurera on Date 10/24/2003 ]
The reason you are getting such varried responses is because typically properties are held in an LLC with no trust. This is true in my area and I don't claim to be an expert.
Good luck at what you are trying to do!
The trust goes on title
Woo Hoo! We are tied 1 - 1. Anybody else willing to break the tie?
Trust on Title, LLC as Ben.
Can someone please state why each option is better over the other. I would like to have some understanding surrounding the options
LLC provides for asset protection, where a trust provides for privacy. In a trust the only one public is the trustee, and they should be non-related to the company. Usually you make the LLC the bene on the trust so you have the asset protection, but no-one knows who actually owns the property. If it does ever come out it is not you individually.
I think the answer might depend upon where you are and where the properties are located.
If your domicile is in the same state as your rental property, then just putting your LLC on title should be sufficient for asset protection. Putting the property into a trust with your LLC as the beneficiary does not provide any additional asset protection, but may add a shield of anonymity.
If you are in one state and the rental property is in another state, then I can see a good argument for putting the property into a trust and making the LLC beneficiary of the trust. Let's say you organize your LLC in your state of residence. If your LLC "owns" the rental property, you would need to register your LLC in the state where the property is located because that is the state where your LLC is doing business. My state charges a "foreign corporation" registration fee to out-of-state companies doing business in the state. This fee is the same fee I would pay if I had originally organized my LLC in that state. Since I have already paid a registration fee to my state of residence, I can save the extra registration fee if my out-of-state property is held in trust with the LLC as beneficiary.
By the way, let's clarify how real estate is titled when in trust. Property held by a trust is really titled to the trustee of the trust. In the public records, ownership may be listed as John Doe, Trustee, 123 Main Street Trust.