Is It Better If a Trust or an LLC Owns Your House?

Most people can only dream of owning a house, so you know that you are in a strong financial position if you own your home and are dreaming about ways to make it look like you do not own it.  In 2023, a quarter of single-family home purchases were by investors; therefore, many of these houses are titled in the name of companies, not in the name of individuals.  Making property belong to legal entities such as companies and trusts is surprisingly simple, and people do it for many reasons, only some of which relate to estate planning.  If you want to prevent an inheritance dispute over your house, or if you are worried that the probate court will force the personal representative of your estate to sell your house, you might consider transferring ownership of it to a trust.  If you are planning on buying another house when you retire, titling it in the name of an LLC could be advantageous in some situations.  To find out more about how and why to make it look like your house does not belong to you, contact a Dade City estate planning lawyer.

Trusts Are Always a Non-Probate Asset

If you establish a revocable or irrevocable trust during your lifetime, it will not go through probate after you die.  It is possible to transfer ownership of your house to a trust.  If it is a revocable trust, you will still be personally responsible for paying property taxes on the house during your lifetime, but you will still be able to keep the house out of your estate in probate court.  An irrevocable trust is legally separate from its owner as soon as it is established, so your irrevocable trust becomes responsible for the house’s taxes even while you are alive.

LLCs Provide Asset Protection, but They Aren’t as Simple as They Seem

Limited liability companies (LLCs) are a popular business structure, because the owner is not legally liable for the LLC’s debts and the other way around.  You can set up an LLC for almost any purpose, only some of which fit the strictest definition of “business.”  Real estate investors sometimes buy houses in the name of LLCs, so if a tenant sues the LLC, the owner of the LLC cannot be responsible for paying the judgment or settlement out of his or her personal funds.  It is even possible to establish an LLC and use it to buy a house where you will live, instead of renting it out as an investment property.  Whether your ownership interest in an LLC is a probate asset or a non-probate asset depends on the LLC’s operating agreement.  If you establish an LLC for purposes of buying a house and passing it to your heirs outside of probate, you should do so with the guidance of a lawyer.

Contact a Florida Estate Planning Attorney About Keeping Your House Out of Probate

An estate planning attorney can help you plan to enable your family to inherit your house without involving the probate court.  Contact The Law Office of Laurie R. Chane in Dade City, Florida to discuss your estate plan.

Source

northwestregisteredagent.com/llc/buying-a-house#:~:text=Yes.,tax%20implications%20that%20can%20develop.