How to pass portfolio to the next generation effectively

Question

Hi BP family. Wondering what others are doing to effectively pass their portfolio to the next generation, either currently held in personal name or corp. Considering reducing capital gains, probate duration. Is there another option besides IFS? Has anyone set up a family trust?

Thanks in advance.

Jerry W. · Answer

@Huong Luu, since I am in the US, I don't know if my situation will help or not.  I own 3 properties in my personal name, so when I pass they will go to my children and get the free stepped up basis.  My main investments are in 2 Sub S corporations that will not enable the properties to get the benefit of the free stepped up basis.  To help overcome this I started an LLC for future acquisitions, and have been buying in it.  I am looking at starting a wholly owned LLC owned by my sub S corporation, then hope to transfer real estate into it and take notes back, then collapse the Sub S leaving the LLC owning everything.  I have more work to make sure this will work, but so far it looks promising.

I am also starting to slowly bring my kids into the business, and my daughter has been helping me fix up a vacation rental or 2.  They need to do more than inherit at a stepped up basis, they need to know how to properly run the business as well.

Chris Seveney · Answer

@Huong Luu

Yes setup a living trust. Have everything flow through that. You will want to get an attorney to map it all out for you correctly

We used mark kohler company (he is on YouTube you can find him), and pricing is reasonable.