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

Asked almost 2 years ago - 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)

  1. Richard J. Chertock

    Pro

    Contributor Level 18

    8

    Lawyers agree

    Answered . 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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  2. Jeffrey Bruce Gold

    Contributor Level 19

    5

    Lawyers agree

    Answered . 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,... more
  3. Eric Jerome Gold

    Pro

    Contributor Level 19

    6

    Lawyers agree

    Answered . 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.

    ** LEGAL DISCLAIMER ** My response above is not legal advice and it does not establish an attoreny-client... more
  4. James Allen Hanson

    Contributor Level 11

    4

    Lawyers agree

    Answered . 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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