Succession Planning For Real Estate Assets

A Succession Plan For Family Real Estate Assets

Passing real estate from one generation to the next is an important but complex undertaking. Real property is not simply handed down like a chest of drawers. There are tax implications and challenges such as dividing a piece of property among multiple heirs. Rental properties raise another set of issues, such as who will manage it and who will collect the rental income.

The Angell Law Firm, P.C., counsels individuals and families in California on succession planning of real estate assets. Our lawyers are well-versed in the issues associated with investment properties and real estate holding companies, as well as other types of commercial or residential property. We invite you to schedule a consultation to set things in motion for a planned and orderly transfer.

Generational Transfers Of Real Estate

Our attorneys have experience with apartment buildings and duplexes, office and commercial buildings and other revenue-producing properties. We have also helped clients arrange for succession or divestment of multimillion-dollar homes, large tracts such as farms and ranches, beach houses, timeshares and other types of properties owned in California and elsewhere. Many of our clients have large and diverse real estate portfolios, with each piece of property subject to unique considerations.

Typically our clients are planning for succession to their children, but many of the same principles apply to succession by a key employee or outside investor. We address key questions such as:

  • Are your heirs interested in and qualified for taking over the rental business?
  • Will one or more of your children run the operation or will you need to arrange for a third-party manager?
  • Are you counting on your properties as a source of retirement income?
  • How will you divide property between two or more heirs?
  • Would the cumulative value of your properties trigger estate taxes?
  • What is your vision and timeline for succession?

Strategies For Owning And Transferring Property

We can explain the pros and cons of placing real estate assets into a limited liability company (LLC), limited liability partnership (LLP), or family limited partnership (FLP), in conjunction with various types of estate planning trusts. Owning property in a separate entity allows you to retain control and collect rental income that will gradually transition the property to the next generation through annual gifting allowances or sale of shares in the LLC or partnership.

There are many more considerations, such as obtaining valuations of the properties, negotiating payments and terms of transfer, restructuring existing real estate entities, and deciding who will be responsible for the tax burden.

We Have A Lot To Discuss. Let’s Get Started.

Real estate succession is complicated, but the longer you put it off, the fewer the options and the more potential pitfalls. Our attorneys will spend time to understand your portfolio, your family dynamics, and your goals to help you plan and problem-solve succession.

From our office in Lafayette, we counsel clients in Contra Costa County and throughout California. You can schedule a consultation at 925-951-0796 or contact us online and we will respond soon.