THE OUTCOME: A LEGACY PRESERVED Frank passed away two years later. Because everything had been properly titled and transferred, there was no court involvement. Lillian retained income through the trust, and David smoothly took over operations as manager of the LLC. The siblings began meeting quarterly to review income, expenses, and discuss potential sales or upgrades. Most importantly, the family didn’t fracture. In fact, the portfolio is now worth 40% more than when we first restructured it thanks to professional management, tax- efficient cash flow, and unity among heirs. KEY TAKEAWAYS FOR RENTAL PROPERTY OWNERS • Don’t own rental properties in your name. Use LLCs for liability protection and centralized control. • Trusts alone aren’t enough. Assets inside a trust still need good planning for operations, control, and eventual inheritance. • Create a clear operating agreement. Prevent family conflict with rules for buyouts, disagreements, and profit sharing. • Plan before health issues arise. Waiting too long can lead to court fights, tax consequences, or forced sales.
THE PORTFOLIO IS NOW WORTH 40% MORE THAN WHEN WE FIRST RESTRUCTURED IT.
FINAL THOUGHT
Your rental property isn’t just an investment, it’s a legacy. If you want it to benefit your children, grandchildren, or even a charitable cause, you need more than a will. You need a structure that protects the real estate and the relationships tied to it. If Frank and Lillian hadn’t asked the hard questions in time, they might’ve left behind a courtroom battle instead of a family business. Don't wait for a scare to start planning.
BRADLEY BARTH, ESQ. Partner BarthCalderon, LLP (714) 704-4828 ext. 114 For a complimentary planning assessment click here.
Bradley Barth is a partner and Supervising Attorney of the firm’s Transactional and Estate Planning Department encompassing business formations and transactional matters, estate planning, domestic and offshore asset protection, probate, trust administration, tax and real estate law. He views his role as a trusted and long-term advocate of asset protection planning in helping his clients achieve and protect their financial goals and lifetime accomplishments.
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