LLC Within A TRUST.. Lawsuit Risk Of Loosing Trust Owned Items?
I just learned that putting an LLC into a trust can put the trust at risk of loss from that lawsuit.
1-can an LLC stand alone in avoiding probate?
2-if yes how should the property be handed over to the LLC to allow for this protection? Quit claim? title transfer?
3- is it ever a good idea to put an LLC into a trust?
4- if yes, what is the best way to do that?
thank you :-?
Corporate fiduciaries have many advantages over individuals as executors and trustees. They are more secure, are automatically bonded, can avoid conflicts of interest where children or other close relatives would otherwise serve as trustees, are excellent record keepers, provide continuity for long-term trusts, normally are more experienced so as to minimize mistakes (in investments, administration and tax decisions), and lessen the need to hire outside counsel. The disadvantages are that they may lack the personal touch, are subject to turnover in their trust officers, often have difficulty in managing active businesses and farms, and at least initially, may be unfamiliar with the family situation involved.
There are several estate planning devices that avoid probate in distributing property at death. These devices principally are joint tenancy with rights of survivorship, beneficiary designations, and revocable trusts. These devices avoid the necessity for probate proceedings only. They do not, simply because they avoid probate, avoid estate and inheritance taxes.
Joint Tenancy
Joint tenancy ownership can be used on all types of property except retirement plans and IRA's (which are governed by beneficiary designations discussed later). Joint tenancy avoids probate because under the law of joint tenancy, when a joint tenant dies, as of the moment of death the deceased joint tenant has no remaining ownership in the property and the surviving joint tenant(s) automatically succeeds to full ownership of the property. All the surviving joint tenant needs to do to establish ownership is file of record (if real estate) or show to third parties (with respect to personal property), a death certificate of the deceased joint tenant. Since this succession is automatic and a probate court determination is unnecessary, joint tenancy property is not normally governed by the terms of the deceased's will or revocable trust.
Revocable Trusts
The final probate avoidance device is a revocable trust. A revocable trust is a legal entity that can hold title to property (in the same manner as other legal entities, such as partnerships and corporations, except that title is in the name of the trustee). As such, it avoids probate by having title in the name of the trustee of the revocable trust and not the decedent at the time of death. At that time, the named trustee (or successor trustee) has authority to pay the decedent's bills and has a fiduciary responsibility to distribute the trust properly to beneficiaries as provided in the provisions of the trust. A revocable trust is the only device that can be used with all types of property and does not depend upon survival of specific persons to avoid probate.
Estate planning and deciding on your legal needs is an individualized process that requires professional assistance and consultation. There is no substitute for meeting with an attorney or other professional financial counselor to discuss your particular situation and needs.
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