Estate Planning With Rental Property
Rental properties are a common investment that can provide asset diversification, reliable income, and, hopefully, capital appreciation. However, landlords also face some significant financial risks when renting a property. At the Houston rental property estate planning law firm of McCulloch & Miller, PLLC, our knowledgeable team of attorneys helps landlords address these risks and develop a plan to ensure the smooth operation of the property for years to come.Why a Landlord Needs a Rental Property Estate Planning Lawyer
When you consider purchasing a rental property, your immediate focus is on ensuring that the property turns a profit month after month. While this is undoubtedly an important aspect of managing an effective rental portfolio, landlords should also keep an eye on the future. Estate planning for business owners raises unique challenges. Landlords are no exception. Below are a few of the most important estate planning considerations for landlords.Avoiding Personal Liability
Landlords may face personal liability for any financial obligation related to the operation of their rental properties. So, if a tenant or another person is seriously injured on your property, they could come after your personal assets. Also, if you are faced with unexpected creditors of your own, those creditors might try to take your interests in your rental properties
By working with an experienced estate planner, you can learn how to protect yourself through the use of corporate structures while minimizing the taxes and administrative burden of running one or more corporate entities. Also, you can learn how to protect your investment from unforeseen creditors or lawsuits you might face in the future. Proper planning is key to protect your investment and to protect yourself from your investment.Planning for Incapacity
Operating a rental property takes a lot of work. Collecting rent, signing leases, transferring assets, and staying on top of tax obligations and maintenance, to name just a few. If you manage a rental property, who will step into your shoes if you cannot fill the role due to sudden disability or incapacitation? While there may be people willing to manage the property if you are unable to do so, they may be legally prevented from acting on your behalf. Working with an experienced legal planner can make sure the right people are empowered to ensure your investment is maintained and maximized for you and your intended beneficiaries.Preserving Future Income
Few landlords consider what will happen to the income generated through their rental properties once they pass on. In most cases, landlords either leave the property to their loved ones through their last will and testament, transfer the property into a Limited Liability Company, or place the property into a trust. Each option provides certain benefits; however, which is best for your situation will depend on your specific situation. For example, leaving a property to family members in a will takes the least effort upfront but does nothing to avoid the potentially lengthy probate process or disputes amongst your heirs. By engaging in a bit of advance planning, landlords can simply transfer the ownership with detailed instructions, providing clarity and reducing the burdens placed upon loved ones.
With a little forethought, landlords can create a comprehensive plan to address the future of their rental portfolio. A estate planning lawyer well versed in rental property assets is instrumental in helping landlords identify their options and implementing an effective plan for the future.Contact the Rental Property Estate Planning Attorneys at McCulloch & Miller, PLLC
If you operate one or more rental properties, it is important that you not only have a backup plan in the event of the unexpected but also that you have a plan for the inevitable. At the Houston estate planning law firm of McCulloch & Miller, PLLC, we have helped countless business owners and landlords address the risks of maintaining rental properties.
We offer all prospective clients a free legal consultation to help you identify your risks and long-term goals. From there, we will devise a comprehensive plan that will provide you and your family with much-needed peace of mind well into the future. To learn more, and to schedule a free consultation with one of the Houston rental property estate planning lawyers at McCulloch & Miller, PLLC, give us a call at (713) 333-8900 today. You can also reach us through our online form.