Many years ago, you had the good sense to save up and purchase a rental property in a good neighborhood. As a result, you now receive a steady stream of solid income from renting the units within the building. When it comes time to create your estate plan, it is important to take this valuable asset into consideration. One option that may be worth considering creating a limited liability company (LLC) to hold the title to the asset.
Four Reasons for Considering an LLC for a Rental Property
Why is setting up a new LLC to hold your rental property worth considering? The following is an overview:
- If handled properly, the LLC can help avoid the need for probate administration in order to oversee the management and distribution of the asset.
- An LLC can provide you with asset protection in some circumstances. Because the asset is held in an LLC, a third party trying to sue you personally for an injury or other harm may be blocked from doing so.
- Placing the property in an LLC could provide you with certain tax advantages that other alternatives do not offer. It is very important to discuss this matter with a knowledgeable tax professional before doing so, however, as the tax benefits of an LLC for holding a rental property depend on the unique facts and circumstances surrounding your particular situation.
- Using an LLC can allow you to pass small portions of ownership in the property over time, if you wish to begin doing so before you pass away.
Making estate planning decisions about important assets like rental properties requires the guidance of an attorney you can trust. We have helped countless clients make these important decisions. We encourage you to check out our client testimonials page today to hear what our former clients have to say about our services.