You have signed your revocable living trust and will and believe that you have completed your estate plan; however, there are important options for ownership of your real estate that you may have overlooked. A revocable living trust is a great method to pass on real estate to beneficiaries by avoiding probate. It allows you to name a successor trustee to manage your real estate after you die or become incapacitated. However, deeding real estate into a revocable living trust does not protect the property against creditors and may not be the best method to own real estate if you have other partners who own the real estate.
If you receive a judgment against you, simply having real estate in a revocable living trust will not protect the real estate from liens as a result of a judgment. In addition, if you own real estate with other people, simply having your share of ownership in real estate in a revocable living trust may not be enough to avoid future disputes with co-owners. It may be a better decision to own real estate as a LLC and have the revocable living trust be a member of that LLC.
There are also estate planning benefits to owning real estate in a LLC because a person can gift shares of the LLC to heirs during their life without changing the deed of a property. This method to gift shares of a LLC can be complicated and should be weighed with other options, but it can be a way to minimize your estate to fall below the threshold to pay estate taxes.
For help in setting up your LLC or revocable living trust, please contact Anthony at (818) 839-5220.