QUESTION
In CO, me and brother want to put our irrevocable trust as the sole member of an LLC with our deceased parents house in it as a rental. Any issues?
Asked on Aug 07th, 2017 on Business Law - Colorado
More details to this question:
The house is currently owned by the trust but we want to turn the house into a rental and have that rent money paid to the trust. Me and my brother are both 50/50 trusties and have another brother who is just a beneficiary of the trust.
1 ANSWER
The contribution of the trust of the house to the LLC is likely fine, but how does title to the house get into the trust? Or is it in the trust?
If there is a mortgage on the house, the transfers might trigger a due on sale clause. That would need to be examined as well. You also do not want the transfer to terminate the title insurance on the house.
The LLC should have an Operating Agreement for purposes of maintaining liability protection.
Answered on Aug 08th, 2017 at 12:56 PM