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Transfering tittle from My name to LLC.

Chandler, AZ |

When filling out the form should I have reserve the life estate interest in the property transferred back, if i do this, if something happen with the llc and the ppl sue me. Does it only go back to the property or my personal asset.

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Attorney answers 2

Posted

More information is needed. What "form" is it? Are you asking whether you are personally liable for the actions of your LLC?

In addition to these issues, you need to be careful that transferring the property (I'm making the assumption you're referring to real property b/c of your reference to a life estate) to your LLC doesn't violate a Due on Sale clause in your trust deed/mortgage.

This answer does not create an attorney-client relationship with K.C. Huffman or Thorp Purdy Jewett Urness & Wilkinson, P.C. In the event you desire to create an attorney-client relationship with K.C. Huffman or Thorp Purdy Jewett Urness & Wilkinson, P.C.you must enter into a written agreement. Without such written agreement you are not a client of K.C. Huffman or Thorp Purdy Jewett Urness & Wilkinson, P.C.

Asker

Posted

I was filling out a online Warrenty deed form to submit to the county recorder. yes am i personally resposible for the action of the LLC? Also by transfering the deed does the mortgage/dead of trust violate the Due on sale. Where in my leander contract i find the due on sale clause? Thanks for repling to my questions.

K C Huffman

K C Huffman

Posted

The warranty deed transfers property from you to the Grantee on the deed. You may want to consider using a different type of deed so you aren't providing the "full meal deal" of warranties. If you properly form your LLC and treat it as a separate entity (don't commingle your personal assets and your business assets) file separate schedules on your taxes, etc then you should not be subject to personally liability b/c of things your LLC did. There are ways to get through the LLC shield though so you really need to be careful when operating the LLC. Typically the trust deed will have a section titled "Due on Sale Clause" or "Acceleration of Payment" or something along those lines. The concept is the lender looked into you and evaluated your credit risk and made a decision to loan you the money necessary to purchase the real property. If you then turn around and deed it to your cousin Joe who is a deadbeat with bad credit then the lender is taking on a lot more risk than it orginally bargained for so the lender protects itself by relying on the due on sale clause. Often times if you have a legitimate interest in transferring the property to an LLC and if you are the single memer in the LLC the lender will agree to allow you to transfer. You will want to contact the lender BEFORE transferring the property and also make sure you get the lender's consent in writing. I'm signing off for the night, so good luck.

Asker

Posted

Thanks a lot for you answer. The reason to go I was thiking about Warrant deed insted of Quit claim deed was. I was told the the tittle insurance will not transfer with the quit claim deed, but it will with a warrent deed.

Posted

You need to discuss this with a business law attorney who has a background in real estate. The information you have given is not enough to answer your question. Are you forming a brand new LLC and contributing the real estate to it as your buy in? Does it already exist and you just want to move the property into the name of the LLC? Do you have a creditor that might be pursuing you now or are you only worried about protection from future creditors? What are you trying to achieve in keeping a life estate interest?

Disclaimer: This answer is provided for informational purposes only, does not constitute legal advice, and does not create an attorney-client relationship. I am licensed in Arizona and can only provide general comments on matters outside of Arizona law. Actual legal advice can only be provided after a direct consultation in which all of the relevant facts are considered before providing a response.

Asker

Posted

yes i am forming a brand new LLc. Yes the propery already exist, I just want to transfer to LLC to protect me form any kind of Teant suing my pesonal asset. I am not worried about the creditor, but I just want to protect my other assets. I just want to make sure that once I die or how does the LLC go to my son.

Brandon Kavanagh

Brandon Kavanagh

Posted

You need to split your two goals apart. If you want to form the LLC for protection, then you need to deed the property to it in fee title. If you then want to plan for your estate, you need to consider doing a will where your interest in the LLC will be noted as being transferred to your son when you die.

Asker

Posted

k thanks, A fee simple title do you mean quit calim deed or warrenty deed. Orginally i was going to go with quit claim deed, then I was told that tittle Insurance doesn't transfer with quit claim deed but it does with a warrenty deed.

Brandon Kavanagh

Brandon Kavanagh

Posted

Fee simple title means not reserving a life estate. The type of deed is different than the type of title being conveyed. You were told correctly to use a special warranty deed so that you do not sever title insurance coverage.

Asker

Posted

My lender said, if i change the tittle into my LLC they will Insiate "Due on sale or Acclerartion clause. How do i resolve this issue. Thx

Brandon Kavanagh

Brandon Kavanagh

Posted

They have that right if they choose to enforce it.

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