CA resident with out of state properties/entity options/alternatives to incumbents

[Simon Lee]

Are there alternatives to Anderson and Royal Legal Services for the formation of a Statutory Trust (Wyoming or Delaware)? From forum posts on here, it seems like both have had client service issues recently. I don’t mind going with them, but I’d like to hear of alternatives if possible.

I'm based in CA and plan on rapidly scaling this year with 2-3 out of state properties and perhaps 4 to 5 next year, so I'm trying to build the proper asset protection/liability and for tax optimization purposes would like to avoid the CA FTB franchise tax per LLC.

My understanding is that the de-facto standard for doing this is with Delaware or Wyoming Statutory Trusts with properties held in Land Trusts, and then possibly layered with an operating and holding LLC. Ideally, I'd

The alternative (but maybe temporary) loophole that has been floated around is to use a disregarded limited partnership in CA as there was a 2019 FTB ruling saying that they are not subject to the $800 franchise fee.

I’ve talked to a few lawyers about how to structure things and they say they would have to “refer” me out and would get back to me. I’ve tried searching on avvo.com but virtually all the results for trusts are for estate purposes.

I’m actually subscribed to a new all-inclusive financial management platform/service that is supposed to do it all (access to CFP/CPA/attorney, tax strategy/filing, trust document formation, review insurance policies, cash flow analysis, etc), but it seems like every question I ask them they are hearing for the first time and aren’t even sure it is covered by their service even though they advertise that they do it all.

Thanks gurus!

[Travis Biziorek]

Hey Simon, I scaled from 0-12 doors in about 2.5 years.

You know what my legal structure looked like? 

Buying everything in my personal name and carrying a large umbrella insurance policy.

It's highly unlikely your LLC structure is going to protect you if push comes to shove. That's not what your lawyer is going to tell you, of course. But they make money when you create these complex structures.

Spending a lot of time on this is also a great way to head down the analysis paralysis rabbit hole. It's preventing you from actually getting started.

I remember thinking through all this in the beginning as well. I got frustrated that I was spending all my time and energy on something that wasn't moving the needle forward. 

Finally, I asked my lawyer one basic question: "How many times have you seen a client with the proper LLC setup sued and ultimately have the LLC provide the protection it is supposed to provide".

Silence... then, sheepishly, "none".

That was all I needed to hear.