My father has multiple rental properties which he operates as a business. While he's still of sound mind what is the best way to turn his business over to my brother & I?
Do you really want to transfer the business now? It may be a better idea for your father to give you a power of attorney over the business; you and your brothers may also want to form a family limited liability company to hold the properties whenever you take ownership. If he is operating the properties separately as a landlord, you would get the property at the current market value, whereas were he to leave them to you through his will, you would then get the property value as of the date of his death.
You don't say how old your father currently is, but he conceivably could live many years, and in that event your father may be liable for federal gift taxes, depending on the properties' value, were he to give it to you during your lifetime. Since the federal estate tax threshold is currently much higher than the gift tax level (which is now $1 million dollars), if you were to wait until his death to take over the properties, there wouldn't be gift tax liability, and unless the properties are worth millions, probably no estate tax due (and even then the tax would be on only the amount over whatever the estate tax threshold would be at the time of his death).
If your father were to give you and your brothers -- or one of you, acting on behalf of all brothers, a power of attorney for the properties, were he to become incapacitated or mentally incompetent in the future, you would be able to manage the properties on his behalf without incurring any of the liabilities involved were he to transfer ownership to you.
Of course, as with all of my online answers, my advice is limited by the brevity of your question and the facts provided. Additional information would be required to provide definitive legal advice, so this answer isn't intended to, and does not, create an attorney-client relationship.
If you feel this answer has been helpful, please consider checking the "thumbs up" box below.
1 found this helpful
5 lawyers agree
Car / Auto Accident Lawyer
It depends on how the business is organized. If it is an LLC it may be a matter of your father transferring his membership interests in the business to you and your brother and filing documents with the Department of State to reflect that. If he operates it as a corporation he could transfer the shares to you and your brother. If he operates it as a sole proprietor, however, he would have to transfer each property he owns to you and your brother by deed. If he operates under a fictitious name you would have to change that registration as well. The process differs depending on the type of entity (if any) involved so you should consider consulting a lawyer so that he or she can consider the details of your situation.
This is a general statement based on the limited information provided. It is intended for informational purposes only. It does not constitute legal advice and does not create an attorney-client relationship.
1 found this helpful
4 lawyers agree