Many clients desire that one or more of their out of state rental properties be donated to a family member while the client is alive or upon the client’s death. This is mostly due in part to one child being solely responsible for managing the out of state property, or maybe that one child lives in the vicinity of the out of state property.
Unfortunately, a donation may cause unintended tax consequences; will not provide any asset protection for the child who receives the donation; and will cause the parent to lose all control and benefits of the out of state property.
A really easy solution to this problem is for the client to place the out of state property into a Louisiana Limited Liability Company and to name a specific child as a limited member of that LLC. This way the client and the child will receive the asset protection afforded through our LLC laws, and we can forego an ancillary probate proceeding in the state where the real estate is located. It’s a “win win” for everyone!