Can a Trust Own an LLC?

If you’re thinking about protecting your business or planning your estate, you might be asking yourself: Can a trust own an LLC? The quick answer is yes! But there are some things you’ll want to know before you go ahead.

At Yu and Yu Law, we’re here to help you figure out how trusts and LLCs work together and why it might be a smart move for you and your family.

What’s an LLC?

An LLC, or Limited Liability Company, is a common way to run a business. It’s popular because it protects your personal stuff if your business gets into debt or legal trouble. Plus, it gives you some freedom in how you manage things and how you pay taxes.

And What’s a Trust?

A trust is a legal setup where one person (called a trustee) looks after assets for other people (called beneficiaries). Lots of people use trusts in their estate plans to avoid court, keep things private, and decide how and when their things get passed on.

So, Can a Trust Own an LLC?

Yes! A trust can own an LLC. This means the trust itself becomes the owner (or member) of the business. The trustee runs the LLC for the benefit of the people named in the trust.

Lots of people do this because it helps keep their business safe and makes things easier when it’s time to pass the business down.

Why Put Your LLC Into a Trust?

There are a few good reasons to do this:

  • Skip Probate: When the trust owns your LLC, the business usually doesn’t have to go through probate court if you pass away.

  • Keep Things Private: Trusts keep your business ownership details out of public court records.

  • Stay in Control: You can set rules in the trust about how your business should be managed and who benefits from it.

  • Extra Protection: It adds another layer of protection for your business assets.

What Kind of Trust Works Best?

Most folks use something called a revocable living trust to own their LLC. It’s flexible—you can change it while you’re alive. Then, when you pass away, it locks in place and helps transfer your business smoothly to the right people.

There are other types of trusts, too, but the revocable living trust is usually the simplest and most common choice.

A Few Things to Keep in Mind

Before you put your LLC in a trust, here are some important points:

  • Check Your LLC Rules: Your LLC’s operating agreement might need to say that a trust can be an owner.

  • Clear Powers: The trust should clearly say the trustee can manage the LLC.

  • Taxes: Putting your LLC in a trust can affect taxes, so it’s a good idea to talk to a tax expert or lawyer.

  • Loans: If your business has loans, the lenders might want to approve this change.

How We Can Help at Yu and Yu Law

Moving your LLC into a trust can be a great way to protect your business and plan for the future. But it needs to be done right so you don’t run into trouble later.

At Yu and Yu Law, we’ll help you every step of the way — making sure your paperwork is in order and your plan fits your goals.

Want to Protect Your Business? Give Us a Call

If you’re ready to learn more or want help putting your LLC into a trust, give us a call. We offer free consultations and clear advice that’s easy to understand.

Give us a call or text at (213) 835-0300 or fill out our book a call with us to get started.