Deeding a Property into an LLC

[robotechno]

Jurisdiction

Texas

Hi all -- first post here, so please be kind!

My father passed away and left myself and my brother behind. My father had a property that he loved and wanted to keep in the family, we're currently looking to rent it out to offset property taxes and recurring costs, but want to set everything up correctly. We eventually want this property to sit in an LLC jointly owned by my brother and I. We have already probated the estate.

Should I deed the property to myself and my brother first, then deed it again to the LLC? Or just deed directly to the LLC?

Thanks.

 

[army judge]

Have you considered a trust?

I suggest you discuss the creation of a "family trust" which will own and shelter the rental property rather than any other vehicle.

You and your brother should make an appointment with a trust and estates attorney to discuss a "family trust", as well as other options.

Good luck.

 

[Tax Counsel]

Should I deed the property to myself and my brother first, then deed it again to the LLC? Or just deed directly to the LLC?

If the property is still owned by the estate and you and your brother are the beneficiaries of the property then generally the better thing to do is first have the executor transfer the property to you and your brother and then from there to the LLC or whatever other entity you wish to use for it (and you have several options, including a LLP, corporation, or, as armyjudge noted, a trust). That's because doing it that way in accordance with the will or intestate succession law (if your father did not have a will) gives you the cleanest chain of title.

Whether the LLC is the best way to hold the property for a rental is something you ought to discuss with a business/real estate attorney and a tax attorney. While there are some advantages to using a trust for asset protection (which is, I gather, what army judge was alluding to), to achieve that you sacrifice some control over the asset and there is a tax cost to that. So you need to be clear about what the pros and cons are of each option before deciding. In my state (which is not Texas) generally a LLC or LLP would be the preferred way to go for most clients, but you should discuss your particular situation with the appropriate Texas attorneys.

 

[zddoodah]

My father had a property that he loved and wanted to keep in the family,

In whose name(s) does title to this property presently stand?

We eventually want this property to sit in an LLC jointly owned by my brother and I.

Why?

Should I deed the property to myself and my brother first, then deed it again to the LLC? Or just deed directly to the LLC?

Does this mean that title presently stands in your name only? If so, why is it in your name only?

When you answer the questions I have asked, please also read/review the disclaimer at the bottom of every page at this site as it refers to legal advice.