LLC owning personal house? Is it legal?

Question

My father left his inheritance to me and another family member in 2 trusts (in our names). I am a trustee for both trusts.

The trusts are 50/50 members in several LLCs for the purpose of buying and investing in real estate property. I am the manager of the LLCs.

I'm trying to figure the best way to use money from one of the LLCs to purchase a house for myself. I plan on living in this house for a couple years then turning it into rental property.

Should I purchase the house using llc money and deed the house to the llc?

If not, what is allowed or what makes the most sense from a tax standpoint?

I don't want to take a mortgage out when there is money available to purchase the house. I also have a sizable umbrella policy if liability concerns come up

Thank you.

Lance Lvovsky · Answer

@Jason Atha

You need to understand what the Trust agreement says. An estate attorney may help or a good CPA that understands Trusts could be a good option too. If the trust agreement isn’t followed, you as a fiduciary can have issues.

Jason Atha · Answer

What type of attorney? Estate? Tax? Real estate? Thank you! @Eamonn McElroy

Eamonn McElroy · Answer

@Jason Atha

I would consult an attorney.  It sounds like you have fiduciary duties to both the trusts and the LLCs.  Using money from the LLCs/trusts to purchase a home for yourself may be a no no, even if you are a beneficiary of one of the trusts.