How to keep a property in the family through partnerships and LLCs
- Posted on: May 24 2022
When it comes to property ownership and preserving it, many families make it a goal for future generations to enjoy. By passing the ownership down through the family, each member is able to maintain their share and interest in it. As more family members come about, then the amount of owners also increases. When deeds are created, this means each owner will need one specifically for them. This also means there would need to be ways for the revenue to be shared as the property is passed to a future generation.
Incorporating a Family Partnership or LLC
Having a family partnership or LLC created provides a way for managing the ownership of the property. Having an LLC with operating agreement permits an individual to become responsible for the family property’s finances and the revenue that it generates. This agreement is able to have ownership divided, with units being owned by family members in relation to the percentage the member has as an owner.
Safeguarding a Farm in the Family
In most cases, a family will want to maintain a farm in the family for as long as possible without having to divide it among family members. With a partnership or LLC, you have an effective tool that lets you do just that. The LLC will hold the entire farm with family members having a share at their designated share percentage.
Many advantages exist for many generations of the family who own part of the farm and not just individually, such as:
Family members with farm experience are able to continue operating the farm or have a designated person operate it. Revenue acquired by rent is distributable among owners and can be used to enhance the farm or can permit an increase to take place through the LLC. A duty is placed among the LLC manager to ensure that all member incomes are accounted for. Selling of the individual units can be made to the extended family during liquidation. Overall liability is not held by any family member.
Creating a Property Trust
When a trust is made for family property, it is held and managed for all of its benefactors. There may be a few disadvantages if a property is being managed actively within a trust. This is assuming that the goal of management is to have a system that is centralized for the property, which family members can benefit from.
Family property can remain as a great source of joy and fulfillment that is able to garner the right amount of income that can create wealth that generations will enjoy. With the struggle of previous generations, the generations today are permitted to enjoy more property for purposes that they feel the need for while also enjoying many other opportunities.
Conclusion
With a family property as an LLC or partnership, it can be used whether the property is small or large. This permits them to continue operating for an unlimited amount of time. Having this choice is a great solution for many families. If you are in need of information regarding a family property LLC or partnership, then you should get in touch with us today.
Posted in: Real Estate Law, Uncategorized
