In our last post, we began speaking on how trusts and LLCs can be used for real estate in planning one's estate. The topic is important, as failing to protect one's real estate from lawsuits and probate after one's death can create extra troubles and costs. These can be avoided by prudent use of a trust or LLC.
We have already spoken about LLCs and Qualified Personal Residence Trusts (QPRTs). Each of these estate planning tools have their benefits and special considerations. Limited Liability Companies can be particular beneficial for those with income producing property. QPRTs can allow for tax savings.
Another tool to use in estate planning, especially for those who don't want to opt for a QPRT, are simple revocable trusts. These are quite flexible, do not require the permission of beneficiaries to change, and offer benefits for those with property in multiple states who want to avoid probate in all of those states. Each revocable trust is tailored to each family's situation. Again, the duration and structure is very flexible.
Before using any of these strategies, one should ensure that doing so fits within one's overall estate plan. A qualified estate planning attorney should be consulted in setting up any trusts or entities. Attempting to do so on one's own is risky, as laws are constantly changing and one may not be able to see all the necessary consequences of one's own financial and family situation.
That said, many people could benefit from using one or all of these tools.
Source: Reuters, "Weighing the what-ifs of trusts and LLCs," Beth Pinsker Gladstone, May 3, 2012.