Asset Protection: Land Trust and LLC Combo

[Denver J Lobo]

I currently own 6 properties through the BRRRR method in Atlanta, GA. I have read a lot of resources on asset protection that say a LLC is the best way to protect an asset, however I have ran into 2 issues 1) Due on sale clauses and 2) The amount of time and effort it takes to keep each LLC siloed (accounting etc). Therefore I have been looking into the strategy of owning each property in an individual Land Trust and having the beneficiary of the LT be a parent LLC.

I have specific questions on your experiences below:

1) Should I put the the beneficiary ownership of the LT in my name first and then assign my ownership to my parent LLC (Assignment, Trustee Acceptance and LLC Acceptance notarized), or can I put my LLC as the beneficiary as I start the new land trust?

2) Is there any downside of using the same LLC as the trustee and beneficiary of my individual Land Trust?

3) Is title in the name of the LLC or LT? Is the bank account opened under the LLC or LT? Is the tenant lease against the name of the LLC or LT?

4) As I acquire new properties, does my LLC need to be amended to include each LT?

Would love to hear about your experiences and if there is potentially a better / more efficient way to do this, I'm all ears!

Denver

[Denver J Lobo]

Hi @Mitch Messer!

Thank you for the extremely detailed answers to my questions. To follow up:

1) The reason books say to put the beneficiary in your name first and then assign it into your LLC is that some states view the transfer of a trust where "grantor is not also the beneficiary of the LT" as a taxable event. Whether this is true or not in practice - I really do not know.

2) Should I put myself as the trustee? To be honest, I'm not that concerned about anonymity, my main concern is asset protection. Is there an asset protection reason that I should not have trustee be myself or the same parent LLC?

3) Can I have the parent LLC be the property manager? On your leases, do you rent to the tenant from your LLC or LT? Similarly, is your bank account under the LLC or LT name? If I get a conventional loan through a bank (as I'm still only at prop #6), should the loan be under my name or the LTrust name that I would put on the deed?

I msg'd your number - really looking forward to catching up and seeing how we can work together.