What are some benefits of holding a property in an LLC or Trust?
Investing in rental property can be a great way to generate passive income, but it can also come with a number of risks. One way to mitigate these risks is to put your investment property into an LLC or family trust. In this article, we’ll discuss the benefits of doing so.
- Protection of Personal Assets One of the primary benefits of putting an investment property into an LLC or family trust is that it helps protect your personal assets from any legal or financial issues that may arise from the property. For example, if a tenant sues you for injury sustained on the property, your personal assets, such as your savings and investments, will be protected if you have your property in an LLC or trust.
- Tax Advantages Another benefit of putting your investment property into an LLC or family trust is that it can offer tax advantages. An LLC allows you to structure your business in a way that can reduce your tax liability, while a family trust can offer tax benefits and help you pass your property down to future generations.
- Ease of Ownership Transfer If you have your investment property in an LLC or family trust, it can make the transfer of ownership much easier. For example, if you decide to sell your property, the transfer of ownership can be done through the LLC or trust, rather than having to transfer the property directly to the buyer.
- Improved Management Putting your investment property into an LLC or family trust can also make the management of the property much easier. This is because you can appoint a manager to handle the day-to-day operations of the property, freeing you from the responsibilities of managing the property yourself.
In conclusion, putting your investment property into an LLC or family trust can provide numerous benefits, including protection of personal assets, tax advantages, ease of ownership transfer, and improved management. If you’re considering investing in rental property, it’s worth considering putting it into an LLC or family trust. Our go to for entity building or trust formation is Rob Hobkirk and his legal team at Brown and Hobkirk. In the above video Rob answers: What is an estate plan, What is probate, What is a will, What is the difference between a will and a trust? For more Trust information, Rob can be reached at Brown and Hobkirk, PLLC 480.531.9479 or online at www.brownhobkirk.com.