THE LEGAL STRATEGY: FROM CHAOS TO CLARITY Here’s what we did to preserve the family legacy, protect the properties from risk, and ensure harmony among heirs:
Each of the six properties was deeded into a newly created Family Limited Liability Company (LLC ). This structure provided two critical benefits: • Liability Protection – shielding Frank and Lillian’s personal assets from tenant lawsuits. • Centralized Management – allowing for a smooth transition of control to their son David, who had property management experience. The LLC membership interests were then transferred into Frank and Lillian’s updated living trust, so that the assets would avoid probate. Upon their parents’ passing, each child would inherit a specific percentage of the LLC, not the individual properties. This solved multiple problems: • It kept the portfolio intact , rather than being divided and potentially sold off. • The kids could decide whether to keep or sell any properties together , with rules spelled out in the LLC’s operating agreement. • David was named successor manager of the LLC, with safeguards to ensure transparency and fairness.
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WE FORMED A FAMILY LLC
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WE UPDATED THEIR REVOCABLE LIVING TRUST
This was the real game changer. The LLC’s Operating Agreemen t included:
These rules became the family’s new constitution for their shared investment. • Buyout terms if one sibling wanted out. • Dispute resolution clauses to avoid lawsuits. • Voting rights and decision-making thresholds to guide major decisions like selling or refinancing.
WE CREATED AN OPERATING AGREEMENT WITH EXIT PROVISIONS 3
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