Estate Planning: What Goes in It?

Let’s talk about estate planning for a minute. I know, you are going to live forever! Until the day that we die. It happens to all of us and y’all know that more than most. I have a new client that I spoke with last week, John, whose father just passed away. His dad lived in California and owned rentals in 3 other states. John is a senior in college and going through the painstaking and expensive process of probating each property in their various states.

John’s dad thought he was doing right and had many of the right pieces of the puzzle, he just didn’t put them on the puzzle board. Meaning, he had a Revocable Living Trust (RLT), LLCs, and even some Real Estate Privacy Trusts (REPT) he just didn’t have everything finished and had some of it set up wrong. He never signed and notarized his RLT and didn’t issue the membership shares of the LLCs to the RLT and didn’t have direction for the REPTs postmortem. Because the Dad thought he had it all done, and didn’t, it is not costing John thousands of dollars and weeks of his life to get it all straightened out.

When it comes to the RLT, what should go in it? If you have had a chance to speak with myself, Adam, David, or anybody else here at NCH you already know the answer to this. If you have not, or if you have forgotten, it’s pretty simple. We recommend that your RLT own your LLCs, all you have to do is issue the membership shares into the name of your Trust. Your rental properties do NOT go inside of your RLT, they go inside REPTs that name the LLC the lifetime beneficiary and the RLT the deathtime beneficiary. Even if you don’t get the deathtime beneficiary listed, because the LLC is owned by the RLT the properties will end up there anyway. Just because you start some of this stuff or have others set it up for you, like us, doesn’t mean you should not make sure that your part is done, it is finished, and that you also keep it current.

One of the biggest transfers of wealth we can give to our heirs is the “step-up in cost basis”. If we screw up the structure and they have to probate the rentals we leave them, well then, they don’t get that transfer of wealth, and we have ultimately failed them. By having nothing set up or a Will, yup you guessed it, failed. As always, if you know you need to do something and don’t know how or what, give us a call we are here to help you out. Hopefully, your heirs won’t have to go through the same thing John is going through and maybe you went through.

With NCH, the state’s top business formation service, you can register your LLC in Nevada quickly and easily. Our specialists will help you choose the right entity for your company and understand why an LLC in Nevada is your best option. We’ll assist you with all necessary Nevada LLC forms, including the vital Articles of Organization, and help you comply with state regulations. In addition, we offer expert assistance with tax compliance, credit building, and payroll management. Schedule a private consultation to explore effective solutions to minimize tax liabilities and protect your wealth. Start unleashing your LLC’s full potential today with NCH. Schedule a consultation with David Vanlandingham today!

DISCLAIMER: The above material has been prepared for informational purposes only, containing opinions of the provider, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please consider consulting tax, legal, and accounting advisors before engaging in any transaction.