Land Trust, LLC as Beneficiary, Ownership %'s and Operating Agreement?

[Mehran K.]

Hi everyone, 

Hoping to get some insight/ideas on the 3 questions below, prior to confirming with legal counsel. I am new to this particular land trust setup. I can't be the first person that's done this for sure.

I have an LLC setup with partner(s) with all the very specific terms in our operating agreement (Ownership Percentages, profit/loss, who's responsible for what initial costs, etc.) We have a specific "Purchase Resolution" that spells out all of our terms for every purchase we make straight into our LLC. Some of these partnerships have different Ownership percentages and capital contributions (50/50, 80/20, etc.)

But let's say, one of the partners buys a property in his or her own name (loan/title), then deeds it to a Land Trust that has our LLC as beneficiary.

1. How do we make sure all of the terms we've agreed to as partners in our original LLC agreement (purchase resolution) still hold true with this new property deeded to the Trust(LLC as Beneficiary)? 

• Does it Happen automatically since the LLC is beneficiary?
• Do we need to have all our terms spelled out in the Land Trust Agreement?
• Do we need to have a separate resolution drafted to accept this new property into our LLC via this Land Trust that spells out the terms? How's this done?

2. How would it play out tax-wise since we aren't making the purchase in the name of the LLC originally? Will the LLC still be able to depreciate closing costs after the property is deeded to the trust with only one partners individual name on the HUD?

3. I'm almost certain the answer is yes, but just making sure that the LLC will be able to take depreciation on the property after it's deeded to the Trust. It will right? 

Any advice for things I didn't think about as well would be appreciated. Thanks so much in advance! :)

[Wendell De Guzman]

I can only answer #1...

1. How do we make sure all of the terms we've agreed to as partners in our original LLC agreement (purchase resolution) still hold true with this new property deeded to the Trust(LLC as Beneficiary)?

• Does it Happen automatically since the LLC is beneficiary?  (Answer: YES)
• Do we need to have all our terms spelled out in the Land Trust Agreement? (Answer: no need)
• Do we need to have a separate resolution drafted to accept this new property into our LLC via this Land Trust that spells out the terms? How's this done? (Answer: no need)

Further Answer: The land trust owns the property. Your LLC being the beneficiary owns the trust. The trustee (I am assuming, this is YOU) controls the affairs of the trust. Having said all these though, consult a real estate attorney in your state as well as an accountant or tax expert.