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Irrevocable trust and LLC #2804041
08/02/20 07:20 AM
08/02/20 07:20 AM
Joined: Jun 2007
Posts: 1,893
michigan
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70 buzz Offline OP
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70 buzz  Offline OP
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michigan
My brother and I have a farm that is in a trust the trust owns the LLC. We rent the tillable acres other building and a house. My brother has had his kids live in the house with very little rent. Sometimes they pay and sometimes they don’t. Real Estate people says it should rent for 1100 a month they pay 400 or don’t pay at all. This has went on for years and had to kick in for several improvements, just as well, septic system, furnace, rewire the house. This has gone on for 9 years and I’m tired of it. I wanted to take a few of the non- tillable acres out of the trust with the house and sell it. He saying no. I think I can partition the court to do so. Being the LLC is in a trust not sure if I can do that. Any Lawyers on board. Thanks

Re: Irrevocable trust and LLC [Re: 70 buzz] #2804047
08/02/20 07:45 AM
08/02/20 07:45 AM
Joined: Nov 2008
Posts: 5,734
Greenville, PA
redraptor Offline
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redraptor  Offline
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Greenville, PA
Wow, that sucks. Is the lawyer or firm who originally drafted that trust still in business? There's where you need to get answers about what you can and can't do. Every contract is different.

Re: Irrevocable trust and LLC [Re: 70 buzz] #2804145
08/02/20 11:53 AM
08/02/20 11:53 AM
Joined: Jan 2003
Posts: 29,974
Oregon
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Oregon
Yep, start by reading the trust documents. You might need to read them over very carefully several times before it starts to make any sense. Then go find a local lawyer who is familiar with the subject. If you can find the lawyer who drafted the original document all the better. I have no idea what you can or cannot do since I've never seen the trust document but typically there is a way to resolve disputes. A lawyer would have to be a complete fool to draft up a document that didn't provide for some sort of dispute resolution. A joint trust split between two brothers 50/50 with no dispute resolution is a bad idea so there has to be an out. Read the document and see what it says. Perhaps it has a mediation section or something like that. If the renters aren't paying the rent and your brother is saying it is okay then he is on the hook for the missing money. Of course, if you force that issue in court then there will be some hurt feelings involved. You might be able to get someone appointed by the court to monitor the trust. If the renters don't pay then the court will evict them.

Re: Irrevocable trust and LLC [Re: AndyF] #2804183
08/02/20 01:33 PM
08/02/20 01:33 PM
Joined: Feb 2015
Posts: 1,715
CA
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crackedback Offline
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crackedback  Offline
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CA
Congrats on subsidizing the other kids... sucks as I've seen this a bunch of times.

Unfortunately, this needed to be treated as a "business" from the outset (signed lease, etc.) especially if the other family members are using the asset and not paying. In a nutshell, if the two of you are trustees, you have a "responsibility" to look out for all beneficiaries of the trust. If the other trustee(s) are OK with the lack of revenue, they are in breach of that duty. Have to have something to hold feet to the fire in cases of non compliance. Nothing like a business with family... kills a bunch of goodwill most of the time.

There is usually language regarding sale of assets and whether the trustees must agree on the sale, etc. Seen so many where there are 2+ trustees and all it takes is one of them to say, NOPE, and everything comes to a screeching halt.

Maybe look for a legal aid help service in the area that could help with answering your question. Most attorneys will provide a consultation for free, might be another course of action.

Good luck

Last edited by crackedback; 08/02/20 01:36 PM.
Re: Irrevocable trust and LLC [Re: crackedback] #2804395
08/02/20 05:24 PM
08/02/20 05:24 PM
Joined: Jan 2003
Posts: 41,767
Round Lake Beach, Illinoisy
Rhinodart Offline
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Rhinodart  Offline
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Posts: 41,767
Round Lake Beach, Illinoisy
My mother's house was in a irrevocable trust. She still has the same lawyer who drew it up and is very good. We had the house removed from the trust a couple years ago after my dad died. Only other person in the trust is my sister, and she and I have to this point agreed with everything thank goodness. Mom recently moved to a senior care facility and does not want to go back to the house to is is time to sell off the contents and house which my grandfather built in 1938. I am not looking forward to selling off the family homestead but neither me or me sister wants to move to Pine Bluff AR! I am glad we have no family renters or anyone else in the family who had interest in the house, all I can say is good luck! Hope the firm that wrote up the original trust are still in business, it will help immensely I believe... luck


The funny thing about science is that if you change one miniscule parameter you change the entire outcome to the way you want it.

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Re: Irrevocable trust and LLC [Re: Rhinodart] #2804404
08/02/20 05:39 PM
08/02/20 05:39 PM
Joined: Aug 2019
Posts: 6,670
Super Spudsville
Mr PotatoHead Online rolleyes
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Mr PotatoHead  Online Rolleyes
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Joined: Aug 2019
Posts: 6,670
Super Spudsville
Yep, get all the docs and see how it is worded.

But your situation blows, its seems many who are in your situation are caught between a rock and a hard place.

Its very hard to break even some of the most simple ones, if all involved do not agree, even when in agreement its not cheap to do.

Factor in a loser family member like in my situation and just wow, GIVE a family a place to live that went from maintenance/ins/taxes to not even paying the taxes and the idea of kicking them out is like I am the Devil. But they can sure buy weed.

GRRRRRRRRR.... I hope it pans out for you.


Have them BUY you out.

Last edited by Mr. Potatohead; 08/02/20 05:41 PM.

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Re: Irrevocable trust and LLC [Re: Mr PotatoHead] #2804406
08/02/20 05:50 PM
08/02/20 05:50 PM
Joined: Jan 2003
Posts: 9,465
North Dakota
6PakBee Offline
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6PakBee  Offline
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Joined: Jan 2003
Posts: 9,465
North Dakota
An irrevocable trust that controls an LLC? I am curious, why was this approach taken initially? What is included in the LLC? At first glance this approach seems to preempt the LLC from making any business decisions that involve the LLC. When my brother and I faced a similar situation, both he and I formed LLC's and jointly owned the property.


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