LLC, Trust, or Both? Don’t Guess With Your Rental Property THE RIGHT OWNERSHIP STRUCTURE CAN MAKE ALL THE DIFFERENCE
Owning rental property can be a great way to build wealth. But once you have tenants, leases, maintenance bills, and a property to manage, there’s another question worth asking: Who actually owns the property? That may sound like a simple question, but the answer can have a big impact on your liability protection, estate plan, and what happens to the property down the road. For many owners, the conversation eventually comes down to two options: an LLC or a trust. Fortunately, you don’t necessarily have to choose one or the other. What does an LLC do for a rental property? An LLC, or Limited Liability Company, can help separate your rental business from your personal assets. If a tenant, visitor, or contractor makes a claim related to the property, that separation may provide a layer of protection for assets outside the LLC. An LLC can also be helpful when multiple people own property together or when you have several rentals to manage. What does a trust do? A trust has a different purpose. It can help manage your property during your lifetime and provide instructions for what happens to it later. A properly funded trust may allow rental property to pass to beneficiaries without going through probate. It can also provide a plan for managing
the property if you become incapacitated. For families, avoiding probate can mean less court involvement, fewer delays, and a smoother transition of property to the next generation. Why not use both? In some situations, an LLC and a trust can work together. For example, an LLC might own the rental property while a trust owns the LLC membership interests. This can potentially combine business liability planning with estate planning. The best approach depends on your properties, mortgages, family goals, tax situation, and long-term plans. Look before you transfer. Mortgages, insurance, and potential tax consequences should all be reviewed before any transfer. A mortgage may contain a due-on-sale clause, and certain transfers can have different legal or tax implications. For New York property owners, Medicaid planning can add another important consideration. At Merlino & Gonzalez, we help property owners look beyond the paperwork and create an ownership strategy that fits their bigger goals. If you’re wondering whether your rental property is structured correctly, we’re here to help you explore your options and plan for the future with greater confidence.
CIDER-BRAISED CHICKEN MICHELE’S RECIPE CORNER
INGREDIENTS • 4 slices bacon, chopped • 8 bone-in, skin-on chicken thighs (about 3 1/2 lbs) • 2 medium tart red apples, cored and cut into wedges • 1 12-oz bottle hard cider
• 2 tbsp chopped fresh thyme • 2 tbsp whole grain mustard • 1 tsp kosher salt • 12 oz fresh Brussels sprouts, trimmed and halved
DIRECTIONS 1. In a large skillet, cook bacon over medium heat until crisp; remove from pan, reserving drippings in skillet. 2. Add chicken, skin side down, and cook 10 minutes or until browned, turning once; remove from skillet. 3. Add apples to skillet; cook 4 minutes or until browned on both sides; remove from skillet. 4. Discard drippings. 5. Add cider, thyme, mustard, and salt to skillet, scraping up any browned bits. 6. Bring to a boil; reduce heat. Return chicken to skillet. Cover and simmer 10 minutes. 7. Add Brussels sprouts. Cover and cook 5 minutes. 8. Add apples and cook, uncovered, 3–5 minutes more or until chicken is at least 175 F. 9. To serve, divide chicken, Brussels sprouts, and apples among bowls or plates. Spoon cider mixture over top. Sprinkle each with bacon.
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