Mildly complex structuring for multiple properties. (LLC, Trusts, Multi-state)

[Javier Molina]

So I am military, originally out of CA so it's my "home state"/residency but very easy for me to change as I am stationed out of CA and have been for a long time.

I own several properties in CA and one in WA. I had a conversation with a Probate/Estate lawyer and he suggested the following but what he said doesn't quite add up to what I have read so I want to see if I am just not understanding or if I am getting bad gouge.

Advice was to create WY LLC that owns all properties, that is then "owned" by a land trust for additional anonymity, that the beneficiary is a regular Trust that owns everything else in my name. So when I die, the LLC and all my properties then become part of the general Trust. Further more I only need to file taxes in WY since I am not in CA so not doing any business there so don't have to file CA taxes.

My questions are as follows:

1. Can I actually dodge CA $800 per LLC filing fee since they like to state that even if your property is out of state because you are making decisions from CA you are doing business in CA so if that is their definition of doing business in CA I am safe? (I have read that CA likes to have their cake and eat it too by claiming any part of the chain of money/business no matter how small).

2. If I do have to file in CA does that mean when I file my WY LLC as a foreign LLC do I loose all my anonymity that WY provides? (Is there any real benefit to creating a WY LLC then? Or do I retain some advantages over just going with a CA LLC).

2a. If I do loose all perks of WY LLC above, I read something about creating a CA LLC that is then owned by a WY LLC (that has zero yearly fees) and that's how I can retain all the WY perks while filing CA taxes.

3. Im struggling to understand the Land Trust part. He said since the land trust can't own anything other than real estate, it doesn't own the LLC, the LLC is just the manger of the estate and holding it for the Trust. That seem like the trust is not between me and the LLC so not sure how that provides an additional layer of protection. When I asked him about this he said it's a bit complex. We were already well past the scheduled meet time so I didn't want to push. Can someone explain how a Land Trust works with an LLC for all of this?

4. If we throw all of this out of the window, what would you recommend I set up for both asset protection, minimizing tax liability (including CA crazy $800 per LLC fee), and probate planing. (I just went through probate when my mom passed and it sucks and would like to prevent my successors from having to deal with the same if possible).

Bonus question, one of my properties is still under mortgage, he mentioned something about transferring it to an LLC can trigger a due-on-sale clause but not when transferred to a Trust. Any advice on that aspect?

Thank you so much for your time!

[Ashish Acharya]

Quote from @Javier Molina:

Quote from @Ashish Acharya:

@Javier Molina California aggressively enforces its $800 franchise tax on LLCs deemed "doing business" in the state, including Wyoming LLCs if you reside or manage operations in California. Registering a Wyoming LLC as a foreign LLC in CA removes anonymity but retains stronger asset protection laws. Using a CA LLC owned by a WY LLC could preserve some benefits, like charging order protection, but doesn't eliminate CA filing fees. A land trust primarily obscures ownership, but its role in your structure needs clarification. For simplicity, consider forming separate LLCs in each state for properties, using a revocable living trust for probate avoidance, and securing umbrella insurance. Transferring mortgaged properties to an LLC may trigger due-on-sale clauses, but transferring to a trust first can mitigate this risk.

A qualified attorney can set this up.

This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.

Thanks for your reply!

What is charging order protection?

I agree that the role of the Land trust in my structure needs clarification and was kind of what I was trying to ask in question 3. If anyone can explain what it's really doing for me and how is it doing it.

Would you recommend adding an "Umbrella" LLC in Wyoming to own all the others to preserve the anonymity and stronger asset protection laws?

If I understand you correctly you are stating that transferring the properties to the revocable Trust, then transferring them to the LLC would not trigger the due-on-sale clause?

I appreciate your help. Really trying to make sense of all of this.

Charging order protection shields LLC assets from personal creditors of its members, allowing creditors only to claim distributions, if any. A land trust provides privacy by keeping your name off public property records but doesn’t offer liability protection without an LLC. Using a Wyoming LLC as a parent (umbrella) LLC can enhance asset protection and anonymity, leveraging Wyoming’s strong laws. Transferring property first to a revocable trust, then to an LLC, may avoid triggering the due-on-sale clause, but this requires lender confirmation. Talk with an attorney.

This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.