We recently had the opportunity to assist James, a local celebrity of sorts and a real estate investor, with his estate planning needs.
James contacted us seeking guidance on setting up a revocable living trust and transferring his LLCs into the trust for enhanced anonymity and asset protection.
In this case study, we outline the challenges faced by James, the proposed solutions we provided, and the successful outcome.
James’ primary objective was to establish a revocable living trust to safeguard his assets and maintain a layer of anonymity.
He had previously consulted with another attorney, who had provided him with some initial information. However, he could not contact the attorney again and was left without clear guidance on how to set up the trust and how to proceed with the transfer of his LLCs into the trust.
His concern was twofold: his occupation is such that he does not want to be associated with the real estate or LLCs publicly and he is fearful that the tenants may end up suing him in court for defects, late rent, etc. which could damage his reputation.
The Proposed Solutions
Our experienced attorney, consulted with James to understand his specific requirements.
She confirmed that James was proposing a suitable plan and addressed Jame’s concerns about transferring his LLCs into the trust. She assured him that our firm would guide him through the necessary legalities and ensure all terms of the trust were appropriately set up for its intended purpose.
To further assist James, we explained the roles within a trust. Beneficiaries are individuals designated to receive benefits from the trust, such as James and his children, spouse, etc. The trustee, initially James, would manage the trust and have the authority to distribute assets and for an added layer of privacy. James expressed his interest in having an alternate trustee, such as his spouse, to act in case of incapacity or passing, which were factored into the terms of the trust James needed.
We established the trust, which ended up being a revocable trust that converted to an irrevocable trust with sprinkling distribution powers for the benefit of James’ children. This allowed James to realize his goals, but also to provide for a stepped-up basis in the real estate on his death, which would allow the assets to be sold by the trustee tax-free.
This case study highlights the significant benefits of a revocable living trust. It keeps assets out of probate, simplifying the distribution process and avoiding the lengthy and costly probate procedure. Additionally, a trust offers potential privacy and, in many cases, tax benefits and protects assets from personal liability.
Our Houston Probate Attorneys provide a full range of probate services to our clients, including helping with establishing trusts. Affordable rates, fixed fees, and payment plans are available. We provide step-by-step instructions, guidance, checklists, and more for completing the probate process. We have years of combined experience we can use to support and guide you with probate and estate matters. Call us today for a FREE attorney consultation.
The content of this website is for informational purposes only and should not be construed as legal advice. The information presented may not apply to your situation and should not be acted upon without consulting a qualified probate attorney. We encourage you to seek the advice of a competent attorney with any legal questions you may have.
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