How should I hold title to my property? In a trust? As joint-tenants? in a corporations? We receive these questions frequently.
California Attorney and Real Estate Broker Chris Adishian answers the question, “What are some of the considerations in deciding how to hold title to the property?” at the South Bay Association of Realtors’ event, “Commercial Attorney Panel-Hot Legal Issues for Commercial Real Estate” on March 5, 2014.
Question: “I have a client I’m working with, with an industrial building, and she wants to hold the title under her own name. Is it recommended to hold it under LLC for better reasons?”
Answer: “Well I’ll take a poke at it, and I’m sure the other guys probably have their thoughts too. This is a common question and there’s a couple different ways to look at it. One is most often liability protection. And I think for the liability protection, you can always get insurance and that will basically cover you on the liability protection if you have adequate insurance.
The other way to look at it is sort of tax planning. And so you need to understand your clients or refer them to a tax adviser, or have their tax adviser consult with them because you probably need to look at the entirety of their investments and look at their tax profile because investment income is typically passive income, and there’s a lot of depreciation, and the chance to use losses in real estate investments. So that might be a factor to put into an LLC.
And the other one would be anonymity. Do they want people to know that she owns it? Because the records will show who the owner is, and those are all public records. With an LLC,
at first glance it’s all in the Secretary of State, but what’s on there? The name of the LLC, the address of the agent, and the name of the agent. The address of the agent and the name of the agent does not have to be the owner, it could be an attorney. So anonymity would be the third reason,
I think, to think about.”
Adishian Law Group is a California law firm with a statewide practice in the areas of Corporate law, Employment law, Real Estate law and Mediation Services. Adishianlaw.com is one of the oldest continually operating law firm websites on the Internet. The firm serves its clientele via three offices located in the major business hubs of El Segundo, Palo Alto and San Francisco. As of March 2013, Adishian Law Group, P.C. has represented individual and corporate clients located across 20 California counties, 4 States outside of California and 9 foreign countries — in over 340 legal matters.
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