Posted by DavidV on January 21, 1999 at 21:19:50:
What purpose does the co-benificiary serve? Is there a certain percentage you assign them?
Setting up land trusts, LLCs… - Posted by Tim (Atlanta)
Posted by Tim (Atlanta) on January 21, 1999 at 12:30:30:
After reading several of Bill Bronchik’s articles on this site, I have decided that now is the time to get all of my properties out of my name.
Any advice on the following plan would be greatly appreciated.
First, create one LLC. It would be a single member LLC, so it will be ignored by the IRS. I would not have to file a tax return for the LLC, the income would flow through to my schedule E as it does now. Right?
Next, set up one land trust for each property. Naming the LLC created above as the benificiary.
Should I create one LLC for each property ?
What paperwork is required to set up the land trust ? I have set up an S corporation before, and can do that again.
One of the goals of setting all of this up is asset protection. If I set up only one LLC, would it be liable for all of the properties, and could I loose them all in a lawsuit?
Also one of the advantages of doing this is hiding the true ownership. I have been foolish in allowing my tenants to know that I own the units. Does the setup above offer me any protection when they know I own the LLC which is the benificiary of the land trusts ?
I would greatly appreciate any input.
Re: Setting up land trusts, LLCs… - Posted by Bill Gatten
Posted by Bill Gatten on January 21, 1999 at 19:59:57:
TIM,
A good (and perhaps simpler) approach, might be to put all your properties into a single land trust, appointing a 3rd party trustee ('serves to provide an info screen and protection agains probate and transfer issues down the road… when/if you “bite the skunk” as it were); You then name an unrelated party as a co-beneficiary with you. Now, since beneficiary interest in a Land Trust is Personalty (not Realty), and since personalty can’t be partitioned by judgement creditors, the property is protected in the way you wanted it to be (even from the state and the IRS). Also, you might save a lot of the rigamarole of the LLC, Sub Chap S., etc… Aside from Bill Bronchik’s excellent materials, a good book on Land Trust can be obtained from The Illinois Institute for Continuing Education in Springfied, Ill.: “Keno on Land Trusts” (Kenoe’s kind of the guru on the subject of Land Trusts). Or… you can e-mail me for the address (don’t have it in front of me right now).
Note too that if you put all of your properties into one trust and changed your mind later, moving them from trust to trust is a simple matter, as the land trust contains reversionary benefits not found in other type of trusts (e.g., no taxation upon reversion or revocation).
Regards,
Bill
'Don’t men to sound too butt-insky, but I’ve written a couple books on the subject, myself, and have a pretty good feel for what you’re looking to do.
Re: Setting up land trusts, LLCs… - Posted by Darin Auvil
Posted by Darin Auvil on January 21, 1999 at 15:53:21:
I believe Bill has a course that thoroughly explains the whole process step by step. I don’t think It cost much either. Definately worth the investment.
Re: Setting up land trusts, LLCs… - Posted by Rob FL
Posted by Rob FL on January 21, 1999 at 21:27:48:
Only problem with having them all in one trust is that a lawsuit caused by one of the properties could result in a judgment that clouds the title to every property owned by the trust.