Unless you do something like this, you are just guessing and that could hurt you.Sounds like you kinda know the industry, but you need an expert to maximize the return on what sounds like a fantastic property....

I guess my question is, now what?

Complicated scenario I have no guesses for best tactic:  dual/final death:  all 401ks are distributed upon death. 

I’m guessing there is some title/ownership issue, he’ll take the money and run.

I’m guessing that the 3.5% rate has a point attached to it.  

I guess I went a little overboard in the creation of my lease, but future versions will definitely be more concise!

I'm guessing it would achieve your similar goals.

I guess another point would be the off set in additional equity regardless.

Remember, LLC's are legal entities, I guess think of them as "cold-blooded" persons who can't move from State to State like a "warm blooded" person like us, formed within / by a State. 

You'd have to subdivide most likely to build two homes (never heard of a residential zoning that allowed two homes on one lot, but I guess its possible).I guess you could keep ownership of the land in a LLC and sign a 99year ground lease to each of yourselves so that the improvements are your personally, respectively.