Land Trusts and LLC Formation in different states
I have a rental property that I own free and clear. Based on some of what I’ve read in the forums and heard on podcasts I’m considering putting the property into a trust with an LLC as a beneficiary. This is in addition to an umbrella policy. This is, of course, pending advice from my accountant and attorney. My goal is mainly asset protection. I’m even considering forming the LLC in one state, the trust in another state, with the property not in either of the two states, but that might be overkill.
I have a couple of questions:
1. I’ve read that one strategy is what I mentioned above: out the property in a trust and have the LLC as a beneficiary. I have also read that it’s better for the trust to own the LLC and not have it as the beneficiary. Why would that be?
2. If I end up going with the trust and LLC as beneficiary, is there any reason not to have the trust and the LLC established in a State other than where the property is located? I’m trying to keep fees down. And some states have better fees. My logic is that it’s the trust that owns the property so it doesn’t matter where the LLC is setup. Texas or Delaware seem like they could be good candidates for establishing the LLC.
Thanks in advance for your feedback.