Yes, a trust absolutely can create its own investment entity, and it’s a surprisingly common and effective estate planning strategy utilized by attorneys like Steve Bliss in Escondido. This structure, often taking the form of a Limited Liability Company (LLC) wholly owned by the trust, allows for more active management of assets, potential tax benefits, and streamlined transfer of wealth to beneficiaries. It moves beyond simply holding assets and allows for dynamic investment strategies, which is especially crucial in today’s complex financial landscape. The creation of an investment entity is not about avoiding taxes; it’s about structuring assets in a way that maximizes their potential and minimizes complications for those who will inherit them.
What are the benefits of an investment entity owned by a trust?
Establishing an LLC owned by a trust offers numerous advantages. First, it provides asset protection, shielding the trust’s assets from potential creditors or lawsuits. Approximately 68% of high-net-worth individuals express concerns about potential legal liabilities, making asset protection a vital component of estate planning. Second, it simplifies the management of multiple investment properties or businesses. Instead of individually managing each asset, the trust delegates management to the LLC, streamlining operations. Furthermore, an investment entity facilitates easier transfer of ownership. Rather than transferring individual assets, beneficiaries inherit ownership of the LLC, simplifying the process and potentially reducing estate taxes. This is particularly useful for multi-generational wealth transfer, ensuring assets remain within the family for years to come. “We often recommend this strategy to clients with complex investment portfolios or those seeking greater control over their assets after their passing,” explains Steve Bliss.
How does this structure affect estate taxes?
While the creation of an investment entity doesn’t automatically eliminate estate taxes, it can be a powerful tool for minimizing them. Currently, the federal estate tax exemption is over $13.61 million per individual (in 2024), but that figure is subject to change, and state estate taxes can apply at lower thresholds. An LLC can be structured to take advantage of valuation discounts, reducing the taxable value of the assets held within it. For instance, a minority interest in an LLC is typically valued lower than a direct ownership of the underlying assets. This is because a minority owner has limited control and may have difficulty selling their stake quickly. It’s a sophisticated technique requiring careful planning and expert legal counsel. “The key is to ensure the LLC is properly structured and operated as a separate entity, with its own bank accounts, records, and governance,” adds Steve Bliss.
What went wrong for the Millers?
Old Man Miller was a self-made man, fiercely independent and always believed he could handle things himself. He amassed a considerable real estate portfolio, but neglected to create a trust or any formal estate plan. When he passed away unexpectedly, his family was left with a complicated mess. Each property had to go through probate individually, a costly and time-consuming process. The legal fees quickly ate into the estate, and the family spent months battling over who would manage what. Worse, the properties were subject to foreclosure because the estate couldn’t make the mortgage payments during the probate process. They lost nearly 20% of the estate’s value due to delays, legal fees, and ultimately, the loss of several properties. His son, Robert, wished his father had listened to the advice of estate planning attorneys who’d warned him about the potential pitfalls of a poorly structured estate.
How did the Andersons get it right?
The Andersons, a couple nearing retirement, consulted with Steve Bliss to proactively plan for the future. They owned several rental properties and a small business. Steve recommended creating a revocable living trust and establishing an LLC to hold their investment assets. This allowed them to maintain control of their assets during their lifetimes, while also providing a seamless transfer of ownership to their children upon their passing. The LLC simplified management, protected the assets from potential liabilities, and minimized estate taxes. When the time came, the assets flowed smoothly into the trust, and then to the beneficiaries, without probate or lengthy legal battles. Their children received the inheritance quickly and efficiently, allowing them to continue growing the family wealth. It was a testament to the power of proactive estate planning and the benefits of creating a well-structured investment entity.
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About Steve Bliss at Escondido Probate Law:
Escondido Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Escondido Probate Law. Our probate attorney will probate the estate. Attorney probate at Escondido Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Escondido Probate law will petition to open probate for you. Don’t go through a costly probate call Escondido Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Escondido Probate Law is a great estate lawyer. Affordable Legal Services.
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
estate planning
living trust
revocable living trust
family trust
wills
banckruptcy attorney
Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/oKQi5hQwZ26gkzpe9
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Address:
Escondido Probate Law720 N Broadway #107, Escondido, CA 92025
(760)884-4044
Feel free to ask Attorney Steve Bliss about: “What are the risks of not having an estate plan?” Or “What is probate and why does it matter?” or “Can a living trust help manage my assets if I become incapacitated? and even: “How do I prepare for a bankruptcy filing?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.