Buying in a LLC VS a Trust?

[Katlynn Teague]

Good morning BP and GO DAWGS!

When purchasing an investment property, what you you say is the better advantage buying in a LLC or buying in a Trust?

I know when buying in a Trust you are able to avoid state and federal fees upfront to be able to establish. However, they do not offer great asset protection, can can costly and timely to establish, and lastly financing and managing can also be more difficult. Trusts are used as repositories for assets that will be distributed to beneficiaries after the death of the original owner.

When buying in an LLC states require fees in order to establish or register within that state. If an LLC owns a piece of land in a state, it must be established or at least registered in that state. There also no exceptions to that rule. LLCs are a type of business entity that shields owners from liability for business debts and avoids double taxation while providing for a flexible structure to manage the business.

Would you consider one better than the other and why?

[Richard Bechtol]

Hi Katlynn,

While a trust is a good vehicle to hold property it does not provide any liability protection itself. On the other hand a LLC does not provide anonymity like a trust can because it is filed with a state. That is why a combination of the two gives the best of both worlds. A trust that is created by a LLC would provide liability protection and anonymity.