Personal and Real Estate Investment Estate Planning

[Kashyap Shah]

Seeking expert guidance on optimal structuring options. 

1. What structure would be recommended for holding personal assets and investment properties, including rentals, to optimize anonymity, asset protection, and tax benefits?

2. Is it beneficial to create individual LLCs for each rental property? If so, what's the most effective way to structure land trusts and LLCs for property holdings?

3. How does transferring assets into a land trust affect one's ability to obtain credit?

4. What is the process for refinancing a property that's held in a land trust or LLC?

5. Are there any limitations or special considerations when refinancing a loan for a property held in a land trust or LLC?

6. If an LLC is placed under a trust, how does this impact the ability to obtain credit through either the land trust or LLC?

[Max Gallagher]

The cost associated with true anonymity is far more than the benefit you receive (or the need in 99.9% of cases). There's a certain firm out there I've seen that advertises this and uses scare tactics to sell expensive estate/legal packages. As Josh mentioned, an LLC owned by a living trust is the typical structure that I'd recommend to most people.

Given the cost of LLCs in certain states and the maintenance/headache required to keep your books in order, there should be a good reason for you to pursue a separate LLC for each property. Owning a few long-term rentals in one LLC usually makes a lot of sense and will save you a lot of time and costs. If, for example, you're looking at a larger, commercial deal with or without partners, it would make sense to have a separate LLC for that property.

The last thing I'll add is that a great liability/umbrella insurance policy is usually one of the best (and cheapest) things you can do to protect yourself and your assets. If there was ever an incident and legal action was taken against you, your defense team is the lawyers from a big insurance company and they're in the business of paying as little as possible.