All Forum Posts by: Chris K.

I think @Ronald Rohde practices in that area. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@LaVonne Eaton

You may want to talk to @Jillian Sidoti. Not sure if she and her team does litigation but they are experts in securities law.

Depending on the amount at dispute and underlying jurisdiction, you may also want to engage a large national firm. I have a few good contacts there. Note that they typically handle disputes where the amount in dispute is in the millions. Good at what they do and can handle issues in multiple jurisdictions. But also very expensive. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Mary Jay

Aside from what @Carl Fischer already wrote, note that the grantor and the trustee could technically be the same person. But you may end up dealing with complications with certain types of trust. For example, it's common for the grantor and the trustee to be the same person for revocable trusts. You almost never see for irrevocable trusts (for various tax reasons). 

Note that there are many, many different types of trusts. Off the top of my head, I could reasonably come up with at least 20 types that all have different uses. Once you add in the variations and the subtle nuances, you may literally have hundreds if not thousands of different trusts. 

So you'll want to get specific about why you think you need a trust. For example, let's say your concern is that you may die before you think the child is capable of wisely handling the money. If so, you could have your estate planning lawyer created a testamentary trust --- a trust that forms upon your death. You don't' necessarily need to create trust while you are alive. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Jay Hinrichs

Pennsylvania has still somewhat archaic laws about electric notarization. I believe you can do it electronically but the person but still needs to stand in front of before you do it. Not an expert on notary laws but my understanding is that other states have adopted statutes that allow the notary to notarize a document without having the person stand in front of you (e.g. video/audio conferencing, etc.). 

We're not there yet! :( 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Bernard Reisz

Very good point about a corporation taxed as a C-Corp versus an LLC taxed as a C-Corp! I read her to mean that she has an actual corporation but I think that was just an assumption.

In my experience, the most common --- and understandable --- reason for owning real-estate in C-Corp is that someone has owned the property for a long time. It's odd to think about, but folks neither had S-Corp or LLCs in the old days. Not particularly unusual for smaller family businesses that have managed to operate for many, many years. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Jay Hinrichs

That might be because the order from Gov Wolf had Saturday 12:01 a.m. as the deadline. I think it got extended to Monday now. But right now, there is not even enough guidance on whether anyone can even notarize documents. All the lobby groups are pressuring the Governor's Office to have some guidance. His office has continued to issue more amendments and guidance as time goes by. So we shall see!

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Marisa Alvarez

I apologize if it came across that way but this is why you need to talk to a CPA. Here are some articles that summarize some of the concerns. As one of the authors mention, there is very little in the tax world where the answer is "never." But from what I understand, owning real-estate investments in a C-Corp gets about as close as you can get to "never." 

https://www.forbes.com/sites/anthonynitti/2014/01/28/tax-geek-tuesday-why-you-should-never-hold-real-estate-in-a-corporation/#13b90027693e

https://krscpas.com/do-you-hold-real-estate-in-a-c-corporation/

https://www.taxlawforchb.com/2017/10/thou-shalt-not-hold-real-property-in-a-corporation/

Setting aside the tax aspect, you must also comply with the legal requirements of owning a corporation. I have no idea what Florida law says on the matter. But in Pennslyvania, having a corporation requires you to hold shareholder meetings, board meetings, election meetings, and more on at least on an annual basis. You need to document all the above with minutes, bylaws, and other corporate formality documents. You also need to deal with payroll even if you are the sole owner. 

Long story short, no one can answer these questions for you except a CPA and an attorney that actually sits down and review your entire situation. In my experience as a real-estate lawyer working with CPAs, people who make this mistake typically end up having to pay a ludicrous tax bill to fix the problem. Hopefully, that's not the case for you. But you won't know until you sit down with professionals to deal with your situation. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Marisa Alvarez

Not sure how you ended up putting 10 properties in a C-Corp. It's almost universally considered the worst way of owning real estate. This is true unless you have very, very specific circumstances. And even then, most CPAs and LLMs I know would say not to do it. The tax savings most likely are not worth the likely hassle of owning it in a C-Corp. 

Based on everything you wrote, I think you should talk to an attorney and a CPA as soon as possible. Based on the facts you wrote, I wouldn't worry about whether you specifically need a Wyoming LLC versus to say a Florida LLC. You have bigger issues to untangle.

@Soh Tanaka

I agree with virtually everything that the article said. But it doesn't paint the total picture. Often times when you get sued and you have a single-member LLC, most litigation attorneys will name both the LLC and you personally as the defendant. The fact that it's a single-member LLC almost guarantees that you are not going to get the lawsuit thrown out during the preliminary stages.

Also as someone who used to actively pursue charging orders against debtors, it's a very unpleasant experience for the debtor. After a charging order has been entered, I typically either see the defendant: (1) declare for bankruptcy within a year or so; or (2) give up and settle with the plaintiff so that they don't waste more time. That's especially for entrepreneurial types since a charging order (and related judgments) basically make it impossible for them to rebuild their life. 

Now I am probably strongly biased here since much of my litigation experienced involved representing institutional lenders. When the plaintiff has billion or even trillions in assets, the defendant will almost always lose no matter what the circumstances are. But I suppose the could be helpful if the plaintiff also lacks a serious war chest for lawsuits.  

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Marita Jojo

Lawyers --- many of whom also provide title services --- are trying to get clarifications on what exactly we can or can't do when it comes to closings and other real estate services. I would assume that all closing services will be postponed until further notice. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Mike Magliette

Way too many variables to simply say that self-storage doesn't have "good" returns. Also, it depends on what you mean by "return" --- there are many ways to measure it. For example, let's say your only metric is cash-on-cash return. That's fine but if that's your only metric you will never find a single deal that makes sense in a low cap market. 

Building from the ground up has been a preferred method for many folks. Compared to other construction projects, self-storage construction is relatively straight forward. It's arguably more important to find the right design team who can do whatever is the best layout nowadays. But I know many people who just decided to convert their building to self-storage since getting another commercial tenant seemed daunting. 

The real question is the business aspect of self-storage. Not an expert on this topic but the best success stories I've seen involved situations where the underlying business was done by a separate entity/experts who knew how to properly run the business. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.