Nuances around Estate Planning with Asset Protection

[Nitish Paliwal]

Hi BP Community,

I have a rental property which is currently under my name. I want to transfer it to an LLC for asset protection reasons. At the same time, I am setting up a living trust for estate planning so that this property can be passed on to my hiers without any difficulty. My attorney has advised me a structure where:

I own the Living Trust --> Living Trust owns the LLC --> LLC owns the property (Title)

My lender is not okay with this 'Nesting' arrangement. They are okay if I transfer the title to the property to an LLC where I am the LLC's owner, or to a Living Trust where I am the owner. They are NOT okay with a Living Trust owning the LLC.

Has anyone run into this issue, and do you have a workaround (if any)? I am in Texas, and the property is out of the state (Oregon) if it matters.

Thanks!