How Rental Property Plays into Estate Planning
Estate Planning Attorney | Owning rental property plays a unique role in planning for your future, and should be handled with the care and attention of an estate planning attorney. In the state of Florida, owning rental property can complicate your estate plans.
As a landlord, it’s important to protect your assets and ensure there’s adequate liability insurance coverage as your first line of defense. If you don’t have proper liability insurance, your other assets could be at risk if something were to happen.
Sometimes it can be best to purchase your rental property through a business entity like a Limited Liability Corporation or a Florida Land Trust. This can ensure your personal assets, like your home and savings, are safe from seizure due to your rental property. An estate planning attorney can help you set up an LLC for your rental property, and ensure that your personal assets are protected. Keep in mind that once you set up the LLC, you must maintain paperwork and documents associated with the business, like bank statements and tax documents.
Another basic but efficient method to protect your rental assets is ensuring there is a power of attorney in place that is qualified and capable to take on the responsibility of handling assets owned by a trust. This ensure that things like income from rental property and property maintenance are handled accordingly.
An estate planning attorney can also assist you in a 1031 exchange which can help defer your taxes with the sale of a rental property. Due to complex rules, it’s recommended to get legal help for the execution of a 1031. This IRS code allows you to defer capital gains on an investment property if it’s sold.
If you have a rental property and are looking to plan the best way to manage it in the future, speaking with The Law Office of Michelangelo Mortellaro. Contact us today for a free consultation.