Q: My living trust includes my rental home. If I create an LLC for that rental, does the LLC need to be added to the trust
My living trust was created in the past, and it already includes my rental property. Next year, I want to create an LLC for my rental property. After the LLC is created, do I have to add the LLC into my trust?
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A: Yes, you would convey the renal home from your trust to your LLC and that would constitute your capital contribution to your LLC. But do not do anything without the assistance of counsel. A lot of people create LLCs on their own without fully understanding what they are getting into and they end up making matters worse for their heirs. I am not opposed to the concept at all but it must be done right. Asset protection comes with costs and ongoing maintenance requirements that need to be understood.
D. Steven Yahnian agrees with this answer
A: Yes, the LLC membership interests need to be transferred to your trust. (An LLC’s membership interests are like shares of stock in a corporation, so they represent ownership.) In other words, the LLC needs to be added to your schedule of assets and the ownership interests of the LLC need to be transferred to the trust. Other things, like insurance need to be changed too, so see an attorney to help you get it done correctly. Best wishes!
Jackie Marie Howard and D. Steven Yahnian agree with this answer
A: Yes. If you want to help your family avoid having to probate the LLC interest when you die, you need to either own the LLC as Trustee of your living trust, or name a beneficiary for your LLC shares in the LLC operating agreement. The best approach is to make the owner of the LLC yourself, as trustee of your living trust.
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