Inheritance law

[Pegasus5112]

What is the name of your state? Texas

I am within a month of inheriting some income producing land in Arkansas. I intend to have the property titled in my name alone. I am inheriting the property from my grandparents who worked very hard to acquire it, and I worked very hard (we're talking several years here) to resolve several trust disputes so that I can finally attain ownership. I don't have any reason to believe my marriage is in jeopardy, but I also have no intention of ever losing control of this property. Things happen, and I'm just not willing to risk it.

I know that if I never put my wife on the title that it is considered separate property in the event of a divorce, but what if I co-mingle the funds from the income with our own (which I fully intend to do)? Does that change anything?

Thanks,
Steve

[LdiJ]

Originally Posted by Pegasus5112

What is the name of your state? Texas

I am within a month of inheriting some income producing land in Arkansas. I intend to have the property titled in my name alone. I am inheriting the property from my grandparents who worked very hard to acquire it, and I worked very hard (we're talking several years here) to resolve several trust disputes so that I can finally attain ownership. I don't have any reason to believe my marriage is in jeopardy, but I also have no intention of ever losing control of this property. Things happen, and I'm just not willing to risk it.

I know that if I never put my wife on the title that it is considered separate property in the event of a divorce, but what if I co-mingle the funds from the income with our own (which I fully intend to do)? Does that change anything?

Thanks,
Steve

It would really be wiser not to co-mingle the funds. Or to at least initially have them kept in a separate account and take them out as needed.

[Pegasus5112]

Quote:
Originally Posted by Pegasus5112
What is the name of your state? Texas

I am within a month of inheriting some income producing land in Arkansas. I intend to have the property titled in my name alone. I am inheriting the property from my grandparents who worked very hard to acquire it, and I worked very hard (we're talking several years here) to resolve several trust disputes so that I can finally attain ownership. I don't have any reason to believe my marriage is in jeopardy, but I also have no intention of ever losing control of this property. Things happen, and I'm just not willing to risk it.

I know that if I never put my wife on the title that it is considered separate property in the event of a divorce, but what if I co-mingle the funds from the income with our own (which I fully intend to do)? Does that change anything?

Thanks,
Steve

It would really be wiser not to co-mingle the funds. Or to at least initially have them kept in a separate account and take them out as needed.
Today 03:20 AM


Thank you. What about trusts? My wife and I don't have one and need one, but can I include this property without losing its "separate property" status? Also, what about LLC's? I am considering starting one to put this property into. I am really in the beginning stages of considering this and am not sure at all how this would change things. Can you put an LLC into a trust, or is it even necessary if the papers of the LLC are written to include inheritance issues?

[LdiJ]

Originally Posted by Pegasus5112

Quote:
Originally Posted by Pegasus5112
What is the name of your state? Texas

I am within a month of inheriting some income producing land in Arkansas. I intend to have the property titled in my name alone. I am inheriting the property from my grandparents who worked very hard to acquire it, and I worked very hard (we're talking several years here) to resolve several trust disputes so that I can finally attain ownership. I don't have any reason to believe my marriage is in jeopardy, but I also have no intention of ever losing control of this property. Things happen, and I'm just not willing to risk it.

I know that if I never put my wife on the title that it is considered separate property in the event of a divorce, but what if I co-mingle the funds from the income with our own (which I fully intend to do)? Does that change anything?

Thanks,
Steve

It would really be wiser not to co-mingle the funds. Or to at least initially have them kept in a separate account and take them out as needed.
Today 03:20 AM


Thank you. What about trusts? My wife and I don't have one and need one, but can I include this property without losing its "separate property" status? Also, what about LLC's? I am considering starting one to put this property into. I am really in the beginning stages of considering this and am not sure at all how this would change things. Can you put an LLC into a trust, or is it even necessary if the papers of the LLC are written to include inheritance issues?

Why do you think that you need to put this land into an LLC or trust? What financial advantage are you wanting to obtain by doing this? Yes, putting it into a trust or LLC could very possibly change the nature of the "separate property" unless handled very carefully. You definitely could not put it into a trust that also contains marital assets.

[nextwife]

If it produces income, use it's income to pay expenses, such as taxes, maintenance, etc. Don't co-mingle. Very simple.

Note: Pulling some money out and using it is not comingling. Using marital funds to maintain/pay taxes etc. is.

[Pegasus5112]

Originally Posted by LdiJ

Why do you think that you need to put this land into an LLC or trust? What financial advantage are you wanting to obtain by doing this? Yes, putting it into a trust or LLC could very possibly change the nature of the "separate property" unless handled very carefully. You definitely could not put it into a trust that also contains marital assets.

The trust (a well-written one, this time. My grandparent's trust was by all accounts poorly written) would be so that my kids or their kids never have to go through what I just went through....5 years of abject frustration. To avoid probate, to eliminate any questions as to what my wishes are, the usual stuff. But it sounds like I would have to have a separate trust just for the Arkansas land in addition to a joint trust.

That sounds like it's getting too complicated. I am considering an LLC because it sounds like it has the potential, assuming that I can be a sole owner, of accomplishing my "separate property" goal as well as allowing me the ability to include inheritance provisions. In addition, since the land is income producing (timber, gas leases), it would also allow me to deduct maintenance and travel expenses, as well as allowing me to purchase vehicles (a truck, for instance, since maintaining the property involves a lot of driving on logging roads) under the company name and deducting it as a business expense.

But the thought of an LLC just occurred to me a couple of weeks ago and I haven't done much research yet. So I could be wrong about all of that....that's why I'm asking you guys.

[LdiJ]

Originally Posted by Pegasus5112

The trust (a well-written one, this time. My grandparent's trust was by all accounts poorly written) would be so that my kids or their kids never have to go through what I just went through....5 years of abject frustration. To avoid probate, to eliminate any questions as to what my wishes are, the usual stuff. But it sounds like I would have to have a separate trust just for the Arkansas land in addition to a joint trust.

That sounds like it's getting too complicated. I am considering an LLC because it sounds like it has the potential, assuming that I can be a sole owner, of accomplishing my "separate property" goal as well as allowing me the ability to include inheritance provisions. In addition, since the land is income producing (timber, gas leases), it would also allow me to deduct maintenance and travel expenses, as well as allowing me to purchase vehicles (a truck, for instance, since maintaining the property involves a lot of driving on logging roads) under the company name and deducting it as a business expense.

But the thought of an LLC just occurred to me a couple of weeks ago and I haven't done much research yet. So I could be wrong about all of that....that's why I'm asking you guys.

A single member LLC is no different than a sole proprietorship or someone engaged in leasing property. It would not give you any tax advantages nor any ability to deduct expenses that you could not deduct otherwise.

[tranquility]

I don't know the rule in Texas, but in California there are two famous case Pereria (sp?)and Van Camp and they have to do with separate property in which the owner also performs personal services. Because the value of the property may increase, in part, because of the services--the community may have some rights.

In CA, the community would at least have the value of the work you perform for the property and, it is possible the community may gain some ownership rights too. To describe the differences would take more space than the forum is designed for, but I would review TX law with an attorney before I spend too much time working on the property if you are in great fear about the community gaining rights over it.

As with LdiJ, I'm not sure what you are trying to accomplish with the LLC.

[Pegasus5112]

Originally Posted by tranquility

I don't know the rule in Texas, but in California there are two famous case Pereria (sp?)and Van Camp and they have to do with separate property in which the owner also performs personal services. Because the value of the property may increase, in part, because of the services--the community may have some rights.

In CA, the community would at least have the value of the work you perform for the property and, it is possible the community may gain some ownership rights too. To describe the differences would take more space than the forum is designed for, but I would review TX law with an attorney before I spend too much time working on the property if you are in great fear about the community gaining rights over it.

As with LdiJ, I'm not sure what you are trying to accomplish with the LLC.

Thanks, LdiJ and tranquility. This is my first experience with income-producing property, and it's obvious I'm approaching this from the wrong direction.

What would you all suggest, then, to meet my goal of maintaining this land as separate property, determining who inherits it, and providing the tax advantages of business-related deductibility?

[tranquility]

That's what you're going to speak to an attorney about. He will ask you many questions to find out your goals, financial position, tolerance for risk, risk profile and many other things to help you plan how to best position and manage this life-changing asset. While you mentioned a few of your goals, there are many others you will find when you talk with a professional. A good one will help you understand the interactions amoung all the choices so you can make an informed decision.

Info edit:
You may want to speak to a CPA and other financial professionals as well.

[Pegasus5112]

Originally Posted by tranquility

That's what you're going to speak to an attorney about. He will ask you many questions to find out your goals, financial position, tolerance for risk, risk profile and many other things to help you plan how to best position and manage this life-changing asset. While you mentioned a few of your goals, there are many others you will find when you talk with a professional. A good one will help you understand the interactions amoung all the choices so you can make an informed decision.

Info edit:
You may want to speak to a CPA and other financial professionals as well.

Sounds like a plan. I really appreciate the input.