29 Aug Can a Trust Own an LLC?

Yes, a trust can own an LLC. In fact, placing your LLC in a trust is often a smart move. 

When you put your LLC in a trust, you can combine the protections that both entities offer. For example, an LLC will keep your personal assets safe from lawsuits, and a trust will help you avoid probate. Placing your LLC in a trust will also protect your privacy and make transferring ownership of your business much easier.

Four Reasons to Put Your LLC in a Trust

1: No Probate Fees

Assets held in a trust avoid probate. This means no costly court processes and no delays in transfer of ownership.

2: More Privacy

Because wills go through probate, they become public records. Placing your LLC in a trust will protect your family’s privacy. In your will, you can name the trust as your beneficiary. After you pass away, the trustee will distribute your assets according to your instructions. 

3: More Security

You can hire a trusted third party to manage the assets in your trust on your behalf. That way, if you are ever out of the country or incapacitated in some way, your assets and your business will remain secure. 

4: Asset Protection

Because a trust is its own legal entity, it further separates the assets from your personal property. Placing your LLC in an irrevocable trust can protect you (and your business) against lawsuits and creditors.

EXAMPLE: 

Scott and Lisa own several rental properties in the Phoenix area. To protect their personal assets and their other properties against lawsuits from tenants, they create an LLC for each property. Then, they set up an irrevocable trust and give it ownership of all their LLCs. By separating their properties, they can protect the bulk of their assets against lawsuits and preserve more wealth for their children’s inheritance.

Estate Planning for Business Owners in Arizona

As business owners ourselves, we understand the importance of planning ahead and protecting your assets for future generations. Our family has been helping other Arizona families build sound estate plans for over 40 years. If you want to learn more about how to protect your business with estate planning, contact us today to schedule a free consultation.

 

Photo by Nader Abushhab on Unsplash used with permission under the Creative Commons license for commercial use 8/14/2024.