When they pick up, explain that you meant for your LLC to be a disregarded entity and you HAVE NOT filed any tax returns yet.

Whether it is a partnership or a disregarded entity is a second tier consideration.

Like @Ashish Acharya, said there is no holding period and if you're transferring into a disregarded LLC holding period isn't relevant. 

A landlord policy can be a commercial policy or a personal lines policy.It's the same as asking if you should buy a single family rental or a 1 unit building.Focus on the coverages and disregard the name of the policy.

Since the trust is a disregarded entity, the benefit is bypassing  probate, not tax issues or liability concerns. 

Putting the property into your name only isn't going to help you if that trust is a disregarded entity and you and your wife file a joint tax return. 

@Levi Perl Since your single-member LLC (SMLLC) is a disregarded entity, all rental income or losses are reported directly on your personal tax return rather than at the LLC level.

If the spouses co-own an LLC together the only option would be if they married couple resided in a community property state allowing them to disregard the entity under Rev.

Will they base their calculations solely on the income from the two legal units and disregard the non-conforming basement?

If your "small Multi" is a 5 unit or higher disregard everything I've written here LOL!