Updated 9 months ago on . Most recent reply
LLC w/ Spouse vs Trust
My better half and I bought our first STR investment property last week, with plans to acquire at least 2 more this year if we can find the right properties. We are putting this property into an AR LLC and was thinking more strategically about the long term holding structure design. Arkansas is not a community property state, so both of us being members creates a partnership, which I'd like to avoid.
I was thinking about creating a Wyoming LLC as the holding company with wife and I as members, so at least there is only 1 partnership, but then got to thinking about the estate planning side of LLC ownership. I believe I can put the Wyoming LLC into a trust, but does that create any issues for operating the LLCs in general? Does the holding company LLC in the trust eliminate the partnership issues as well?
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@Don Konipol one potential issue I see with serries LLCs is it is a relatively new structure without a lot of case law to back it up. It might be great in TX but not in AR were he is. But then again I am nitpicking. Series LLCs are not available in MD.
@Damon Kellar why didn't you buy the property in the LLC? Transferring a property to an LLC can cause issue; due on sale, loss of title insurance, potential liability, etc. Two member of an LLC does not create a partnership. It does require a partnership return but why would that be an issue. It is still a pass through entity.
I think you are way over complicating things. As someone that has multiple businesses I can tell you complexity costs both money and time. For me it has been a LOT of money. Don't make my mistake.