How LLCs and Trusts work together

How LLCs and Trusts work together
#estateplanning #cmslawfirm #probate
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Christopher Small is the owner of CMS Law Firm LLC. He created it with one goal - help YOU live a great life and leave a great legacy.
You'll find information here on estate planning, probate, revocable living trusts, irrevocable trusts, life insurance trusts, charitable giving, wills, trusts, power of attorney, medical power of attorney, trustee selection, and everything in between.
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[@angelav4253]

I was wondering how to structure rental properties in an LLC and trust. Thanks Chris! I love your content.

[@CMSLawFirmLLC]

Thank you!

[@alwayspushforward]

​@@CMSLawFirmLLChow can I find the indenture trustee of my apartment complex?

[@slantedlovestories]

This was very brief, yet an educational breakdown.

[@CMSLawFirmLLC]

Thanks!

[@camaroseller481]

I f’ing love this guy

[@CMSLawFirmLLC]

Thanks! 😎

[@batmanbluedarker5087]

I was looking for this for a long time thanks

[@CMSLawFirmLLC]

You're welcome 🙂

[@ElidaeDanh]

I AM OBSESSED. THE BEST, And The REST😫💅🏽

[@pakksupreme]

Do an irrevocable trust tho 😁💪🏾

[@caseymarshall4985]

Correct way better

[@CMSLawFirmLLC]

See above. Irrevocable trusts are great tools, but there is a lot of potential downside to them.

[@TriRegionHittaGreen]

@@CMSLawFirmLLCbut doesn’t some of the the llc’s protections become useless when putting it in a revocable trust.

[@1truebeauty4u]

Thanks for making this so clear

[@CMSLawFirmLLC]

You're welcome!

[@carterfamily9096]

Thanks for the info! I heard that a trust can b used as collateral in a lawsuit, would that make a LLC vulnerable as well?

[@rudymora4850]

Exactly, I think it would as it is revocable and could be forced to reassign which defeats the purpose of an LLC.

[@Hyper_Driven]

@@rudymora4850 or defeats the purpose of the trust. Perhaps an irrevocable trust.

[@rudymora4850]

@@Hyper_Driven Irrevocable trust would not be a part of the grantors estate so how could it be used as collateral though?

[@CMSLawFirmLLC]

In a lawsuit anything that is yours can be taken if there is a judgment against you (with some exceptions). Having the trust doesn't change that. The LLC itself isn't vulnerable, but your interest in it could be (this is true with a trust or without one).

[@CMSLawFirmLLC]

@@rudymora4850 not exactly. See my comment.

[@ElidaeDanh]

I LOVE IT

[@CMSLawFirmLLC]

Thanks!

[@TioBrax10]

Awesome!! 🔥🔥🔥

[@CMSLawFirmLLC]

Thanks!

[@micahiaharrell6185]

How do you choose a trust fund company? What should I look for when I am choosing?

[@diogoramiro3987]

so this means... that they can't come after the home because is owned by a trust? I'm new trying to understand this because I want to do this. leaning now

[@CMSLawFirmLLC]

No exactly. With an LLC they won't be able to come after all of your other stuff if something happens at the house. The trust just helps to avoid probate.

[@RL-ln5xo]

Nice

[@CMSLawFirmLLC]

Thanks!

[@137Enki]

Thank you

[@CMSLawFirmLLC]

Glad to help!

[@robindennis544]

If the revocable trust is a joint trust in a non-community property state does that mean the LLC is then a multi member LLC since the revocable trust is disregarded for tax purposes and therefore the LLC is own 50/50 by husband and wife?

[@CMSLawFirmLLC]

No. The trust is disregarded for tax purposes, not for ownership purposes. It's still a single member LLC. Just like if you are married and have a "single member LLC" created while married, it's technically community property and thus owned 50/50 - but still treated as a single member LLC.

[@jacobt8993]

So I rent an apartment. I have a LLC and created a trust. But how do I make my trust own my LLC. I eventually want my trust to own everything I have.

[@CMSLawFirmLLC]

Assign the LLC to the trust so it becomes the owner - ask a lawyer they can help.

[@shadrachwilson1211]

Hello Chris, on the same question I drive for shuttle company near LAX California using 1099, in the forms I filled during the signup process, I chose sole proprietor. I got a SSN & TIN but now I want to register an LLC and use that instead of my name. Can I assign everything under the new LLC as well?@@CMSLawFirmLLC

[@freddylong4095]

Rev Trust doesn’t offer creditor protection in many states.

[@CMSLawFirmLLC]

It doesn't offer creditor protection in ANY state. :)

[@joeysjourney24]

I've been trying to establish my irrevocable living trust, but you are talking about a revocable living trust, so I'm confused as to the difference. More research I guess. What about the cestui que vie trust? Is that a thing or not? Thanks

[@CMSLawFirmLLC]

There is no such thing as an irrevocable living trust. The living shouldn't be in there. Once you create an irrevocable trust it is static - no changing it (which is why revocable trusts are called living trusts).

[@joeysjourney24]

@@CMSLawFirmLLC well, now that makes perfect sense. Thanks for explaining that in lamens terms. Awesome. Appreciate it very much!

[@daymackgaming6903]

Looking to find out more on this subject. Can you point me in the direction of some books maybe or something? TIA!

[@CMSLawFirmLLC]

The first place I'd would be google. Tons of helpful info there.

[@dman10000000]

Thanks for the video...I have a few LLCs with rental homes and a brokerage account...when I put my trust together, would I have to change the LLC's beneficiary to the name of the trust?...or is it done in the operational agreement?

[@CMSLawFirmLLC]

LLCs don't have beneficiary designations. With those assets I'd hire an attorney to help to make sure it's done right.

[@SoulMassage8]

What about umbrella holding?

[@CMSLawFirmLLC]

I'm not sure what you mean by umbrella holding. Can you elaborate?

[@levon3123]

But if you create a revocable trust that the LLC is under, the fact that it becomes revocable also means that a judge can change the beneficiary of the trust to the person suing the LLC if they win the case. Did you mean irrevocable trust? I trust that has more ironclad ruling.

[@CMSLawFirmLLC]

I don't believe you are correct. :)

[@headlibrarian1996]

Why assign the interest rather than make the trust the initial member?

[@CMSLawFirmLLC]

You can do it either way.

[@frank_ferrigno]

What about trust owning holding company which holds individual rental property LLCs?

[@CMSLawFirmLLC]

You could do that... if you wanted to complicate things.

[@akkadiansprayart]

Yea but if sues personally, the creditor can change the beneficiary of the trust to the person suing you, now you loose your trust and your LLC? If I’m not mistaken

[@luisa.3318]

If the LLC is owned BY an S-Corp and the S-Corp is under the Trust, would still be possible with just 1 more step?

[@caseymarshall4985]

So have an holding company as a S-Corp ran by the trust

[@CMSLawFirmLLC]

I'm not sure what you're asking. If you are personally sued all of your assets are available to the person suing...

[@CMSLawFirmLLC]

@@luisa.3318 would what still be possible?

[@CMSLawFirmLLC]

@@caseymarshall4985 I think you guys are making this more complicated than it needs to be. Reach out to a lawyer and they can help you out. :)

[@utubedude2842]

Don’t you lose asset protection by having a living trust own an LLc?

[@CMSLawFirmLLC]

Nope. As long as the LLC follows the rules, it's good to go.

[@gordonau-hoon8419]

So I need to have valuable assets like houses 🏘️ and stuff first ,I don't know im trying to learn this?

[@CMSLawFirmLLC]

Yes. No need for asset protection if you have no assets. Get the assets first. Worry about this stuff second.

[@KenKammal]

Hi Christopher Hope all is beautiful... Question... if I have a Trust that I want to have 100 ownership of a Holdings Co I am forming... should I form the Holdings Company as an S-Corp or LLC?

[@CMSLawFirmLLC]

Not enough info to answer this question... but probably an LLC.

[@CoolCupMediaLLC]

New subscribe

[@CMSLawFirmLLC]

Appreciate you!

[@kyrabrown5994]

Hi Mr. Smalls, so do I need money/or a certain amount of money to establish a Trust? And if I establish a Trust through you or any lawyer, what will that run me?

[@TheHealersHaven]

Would it be smart to open the trust first or create the LLC first ?

[@lifesofar3720]

how about irrevocable trusts. People are scared because its permanent but what if that is something I want. Would it work the same?

[@stevenrussell5469]

We put our property in a trust already, so that it would be out of my mom’s name. I was wondering how that works in an LLC after? Specifically with descendants of beneficiaries

[@CMSLawFirmLLC]

If that's something you want you should do it. Talk to a lawyer to find out how it works.

[@CMSLawFirmLLC]

@@stevenrussell5469 the property goes wherever the trust directs it to go.

[@RoderickFreeman-r2u]

Say if I have drug charges pending with a LLC business with property n land and if I get a trusts. Will it protect my assets? From being taken ?

[@mckinneyjames28]

I got trustee problems with my dad and my second trustee and really need help 🥺😤

[@CMSLawFirmLLC]

What seems to be the problem?

[@nathanacquah]

Hey Christopher, I'm interested in learning more. Would you be open to chatting?

[@CMSLawFirmLLC]

Sure!

[@nathanacquah]

@@CMSLawFirmLLCwhere can I schedule an appointment with you?

[@atruagent1037]

we are in MO an have a few ?s PM use please

[@CMSLawFirmLLC]

Sorry, not licensed in MO. Need to talk to a lawyer there.

[@joegomez2935]

The IRS is stating that I owe them money it’s been over 13 years and they are still asking for that money billing me and taking money from wherever they can if my girlfriend makes a large deposit into my account because she wants to open up a trust account together what is your advice, if I owe money, would it be smart for her to open an account with me or would it be better if we can do it differently because she wants to add me into her account or her being added to my account she wants to open up a trust what is your advice? Will the IRS come after us if they know we have money in the trust even though they shouldn’t be going in there.?

[@CMSLawFirmLLC]

My advice is to talk to a tax lawyer and an estate planning attorney in your state. You don't need a joint account to create a joint trust, though.

[@empresslocs42]

How do you fund your irrevocable trust ? Can you use your trust ein instead of your ssn to get paid as a 1099 contract worker ?

[@CMSLawFirmLLC]

You fund your irrevocable trust with gifts. If you put earned income into it you'll have to pay HIGH income tax on it.

[@vindiditagain2267]

Why use a revocable instead of irrevocable?

[@pakksupreme]

Right 😂

[@caseymarshall4985]

Because it’s cheaper and people can afford it.

[@CMSLawFirmLLC]

Control. Capital gains tax issues. Gift tax issues.

[@CMSLawFirmLLC]

@@pakksupreme wrong. :)

[@CMSLawFirmLLC]

@@caseymarshall4985 wrong. :)

[@kikijewell2967]

Does this still apply in 2024? I have heard various rumors that the laws have quietly changed to undo the protections of both LLCs and Trusts.

[@CMSLawFirmLLC]

Yes. It still works this way. The new law just deals with disclosing the beneficial interests to the IRS.

[@jadanhospitality]

Can I obtain my holding company's EIN with my Fam Trust EIN with out using my ss#?

[@CMSLawFirmLLC]

Usually revocable trust EIN is your SSN - LLC EIN is a separate tax ID.

[@franciscoalderete6645]

What is the process to start your trust

[@CMSLawFirmLLC]

Talk to a lawyer in your state.

[@stefanbigbear]

Do I need an LLC for rental properties? I have properties titled in my revocable trust. Is that bad?

[@waynebryant1658]

Does this method works with the new law for LLC taking place Jan 2024

[@CMSLawFirmLLC]

What new law? Usually this is state specific so I'd need a little more info.

[@headlibrarian1996]

@@CMSLawFirmLLC I believe @waynebryant1658 is referring to the Corporate Transparency Act.

[@caseymarshall4985]

Why not irrevocably trust

[@CMSLawFirmLLC]

Loss of control. No step up in basis at death. Gift tax implications. It could work, it just depends on your goals.

[@koby671983]

Hi when I give the trust k1 from the llc is the trust need to pay tax on that ?

[@CMSLawFirmLLC]

It passes through to you individually. For a revocable trust the tax ID is your social security number.

[@anonomous4543]

He just sped through the last part.

[@CMSLawFirmLLC]

I was running out of time! :)

[@ezswan]

you do realize that the trusts income is taxable under trust tax brackets which are extremely high right?

[@headlibrarian1996]

Revocable living trusts are grantor trusts, and thus are invisible for tax purposes.

[@CMSLawFirmLLC]

@@headlibrarian1996 this is correct.

[@CMSLawFirmLLC]

Not in this case. It's a pass through entity for taxes. And, you can draft irrevocable trusts so the grantor is crediting with the income (and therefore pays the tax at their bracket). Look up defective grantor trusts.

[@chaneejackson]

How much to set up a trust ?

[@sptheartist1803]

Couple hundred

[@dewayhecomer6029]

@@sptheartist1803 from where? That’s a great price 😅

[@CMSLawFirmLLC]

Depends on where you are and who you work with.

[@araxavionfinnie552]

Does a trust have to be created before the corporations that go inside of it? Also, does an S-Corp have to be formed before the LLCs that go inside it?

[@CMSLawFirmLLC]

kzbin.infoW39tUkk14MM?si=Oh8xJfMHS6pQt2Rl This might help.

[@CaliforniaTravels]

Can a judge order you to change the beneficiary of the trust?

[@dremade3332]

Yes, they can.

[@CaliforniaTravels]

@@dremade3332 so, how does it protect your assets?

[@Hyper_Driven]

Depends on the circumstances when the trust was created.

[@Herbzandvibez]

Maybe on a statutory trust. Not a non statutory one

[@CMSLawFirmLLC]

@@dremade3332 wrong.

[@DRENCHATTIRE]

Help me set mine up

[@CMSLawFirmLLC]

If you're in WA, start from here: cmslawfirm.com/

[@IamJohnKelly]

Can I put my name and ssn in a trust or bank account and life insurance to protect me from some government agency

[@CMSLawFirmLLC]

If the government is coming after you there might not be much you can do... but I'd need more info to know for sure.

[@DTSupstateNY]

Personal home should go into different llc ?

[@CMSLawFirmLLC]

REALLY depends. Talk to a lawyer about your specific situation.

[@austinfincher1649]

So in order to get this all set up for me, I would need to talk to someone like you to do that?

[@CMSLawFirmLLC]

You don't NEED to. Would you WANT to? Yes.

[@coreyleggett3800]

Can you help me???

[@CMSLawFirmLLC]

How can I help?

[@BIZLE69]

I need help Sir

[@CMSLawFirmLLC]

How can I help?