Posted on: 20th Mar, 2009 03:30 pm
1. Is there a way to protect yourself from potential liabilities if you are the sole title on a house ?
2. Would transferring ownership to a Trust provide better protection than having your name on the title ? If so, what type of deed would you use to transfer ownership to trust ?
3. What are the costs involved in setting up a trust?
4. What are tax implications?
5. Can you be the sole administrator of the trust ?
6. How can you designate living rights, right to sell property if you establish a trust?
I know this is too many questions. But love this site as I have learnt so much in so little time. Appreciate all the meaningful tips.
Thanks again in advance.
2. Would transferring ownership to a Trust provide better protection than having your name on the title ? If so, what type of deed would you use to transfer ownership to trust ?
3. What are the costs involved in setting up a trust?
4. What are tax implications?
5. Can you be the sole administrator of the trust ?
6. How can you designate living rights, right to sell property if you establish a trust?
I know this is too many questions. But love this site as I have learnt so much in so little time. Appreciate all the meaningful tips.
Thanks again in advance.
Hi needa,
The best way to protect your assets from potential liabilities, is to create a trust as well as a limited liability partnership. This will provide you with a double protection from liabillities.
You need to first set up a trust and establish yourself as the trustee of the trust. He then needs to establish a family limited liability partnership where you would be the General partner and your trust would be the limited liability partner. You will retain 1% of the ownership to General partner i.e yorself and the rest of the 99% would be retained by the limited liabllity partner i.e. the trust. Then you need to transfer the property from yourself to the limited liability partnership through a quitclaim or warranty deed.
Now, in future if any judgment is obtained against you and your lenders try to recover money from your property, they will be able to obtain only 1% of the property which is owned by you as the General partner and not the 99% of it of which the limited liability partner i.e. the trust.
You do not have to pay too many taxes as you would be transferring the property from yourself to the limited liability partnership in your name. This will look like change of form of the ownership and not as a sale. Thus, you will not be required to pay heavy recordation or stmp doc fees.
However, this is not a legal suggestion and it is advised that before you make up your mind about this, do consult an estate planning attorney in this regard.
The best way to protect your assets from potential liabilities, is to create a trust as well as a limited liability partnership. This will provide you with a double protection from liabillities.
You need to first set up a trust and establish yourself as the trustee of the trust. He then needs to establish a family limited liability partnership where you would be the General partner and your trust would be the limited liability partner. You will retain 1% of the ownership to General partner i.e yorself and the rest of the 99% would be retained by the limited liabllity partner i.e. the trust. Then you need to transfer the property from yourself to the limited liability partnership through a quitclaim or warranty deed.
Now, in future if any judgment is obtained against you and your lenders try to recover money from your property, they will be able to obtain only 1% of the property which is owned by you as the General partner and not the 99% of it of which the limited liability partner i.e. the trust.
You do not have to pay too many taxes as you would be transferring the property from yourself to the limited liability partnership in your name. This will look like change of form of the ownership and not as a sale. Thus, you will not be required to pay heavy recordation or stmp doc fees.
However, this is not a legal suggestion and it is advised that before you make up your mind about this, do consult an estate planning attorney in this regard.