19 Oct Should I create a company to hold properties my kids will inherit?

Q. I have three rental properties on our names. Should I make an LLC or corporation or leave it in our names? What’s the pros and cons regarding the safety of my assets, taxes and easily transfer to my kids?
— Landlord

A. It sounds like you may need to speak to an estate planning attorney who can look at your entire estate and help you decide what’s best for your specific circumstances.

But here are a few points to consider.

The biggest reason to use a corporation or an LLC is the liability protection, said Michael Karu, a certified public accountant with Levine, Jacobs & Co. in Livingston.

“We prefer using an LLC since profits may be disproportionately distributed and the annual cost is lower,” he said.

You can also have the ability to gift percentage interests of the corporation or LLC as part of your estate plan, Karu said.

“Assuming you want to gift 30% of the real property to a child, it is far easier to gift a percentage interest in an LLC than the real property,” he said. “There also may be the ability to discount the gift as the percentage interest in the LLC is not readily marketable and, most likely, lacks management control.”

Email your questions to .

This story was originally published Oct. 19, 2020.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.