A living trust is established by a grantor, who names a trustee to manage the trust on behalf of a named beneficiary. It is a legal document that can possess ownership rights over any of the grantor’s assets, including ownership of an LLC. Both types of trusts can be members of an LLC.
How do you transfer an LLC to a trust?
Here is how you can transfer your LLC to your Trust:
- Draft and Execute the Transfer Document.
- Draft and File an Amendment to your Articles of Organization with the Arizona Corporation Commission.
- Amend the Operating Agreement.
- Have LLC Members Sign a Resolution Accepting Transfer.
What happens if I transfer my rental property to a LLC?
Transferring rental property to LLC is one way property owners can protect their assets in case of legal action. Even property that is put into trust does not have as much protection from liability as rental property transferred to a limited liability company.
Can a trust be used to transfer rental property?
Even property that is put into trust does not have as much protection from liability as rental property transferred to a limited liability company. A land trust does provide some protection against frivolous lawsuits because most of the property can be under an anonymous owner.
When to use a LLC or a trust?
For land or second homes with significant equity you may want to consider a limited partnership or domestic asset protection trust which can protect the property from the owner’s personal liabilities. Generally, an LLC is not used unless the property itself creates liability.
Can a land trust be used to own real estate?
Additionally, we rarely recommend clients use land trusts to own property for asset protection purposes as land trusts provide little actual asset protection beyond making the owner of the property difficult to determine at the county records. There are lots of options and many nuances to how you should own your real estate.
