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How to transfer real estate of deceased father to an LLC or irrevocable trust or real estate trust?

Oyster Bay, NY |

I am the executor of my recently deceased mother's estate in New York. My sisters and I have agreed to transger ownership of the house to one sister (in exchange for other items of equal value from the estate). My sister plans to fix it up and do seasonal rentals, and she wants to put title of the house in an LLC or a trust of some sort. Can you tell me (1) which is a better entity type to own/hold the property for tax purposes - an LLC or a Trust of some sort, (2) how do I transfer title to the LLC / Trust, (3) will I need to pay an additional sales tax on top of the 'death taxes'

Attorney Answers 4


I think much of the answer depends on your sister's financial situation, and what she intends to do with the property. You and she really need to sit down with an estates lawyer.

If you'd like to discuss, please feel free to call. Jeff Gold Gold, Benes, LLP 1854 Bellmore Ave Bellmore, NY 11710 Telephone -516.512.6333 Email -

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The questions sound simple enough, but in reality, they can be quite complex. Your sister needs to consult with an estate planning / tax attorney to develop a plan for her acquisition of the house. There is simply not enough detail here to provide you with much more.

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You would transfer the property to your sister first by executor's deed. She would then transfer the property to either and LLC or a trust formed by her. Which entity is better suited for her and what tax ramifications it would have depend on her specific circumstances and her goals. She should consult with a trust attorney and her accountant to determine what is best for her.

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Thank you for your response. I greatly appreciate it. Could the property be transferred directly to the LLC / Trust first? My sister's financial situation is not great. She has less than $75K income/year, but owns her own house outright, has a retirement account w/sufficient funds, but that's it. The taxes paid at death were a sizeable chunk. My thinking was the house could be held in an LLC and rented out, etc. BUT all the money will be put back into maintaining the house, a future renovation, and keeping it in the family for generations (that's the hope). My thinking was a trust may be better suited for that objective, though I'm not sure.

Richard J. Chertock

Richard J. Chertock


As I stated, she would need to consult with an trust attorney and an accountant or tax attorney.


My colleagues are correct that you really need the advice of a local attorney.

With respect to the "how do I transfer" question, though, you need to open a probate estate. Just because the will says you are executor doesn't mean anything outside a probate action. Once you have a probate action open, the will tells the judge how your mother wanted things distributed. The court will approve the executor's deed which transfers title from the estate to the sister or whatever entity she decides to use.

I'm not sure how sales tax would be applicable in this situation, but maybe NY has very different sales tax laws. The "death taxes" are simply state inheritance taxes, which most states have phased out and those that still have them have reasonably high exemption amounts.

I agree that you need an estate attorney, but it sounds like the more pressing issue is opening a probate estate.

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