My elderly father has asked my 2 brothers and me to be co trustees for the 4 small apartment complexes he has owned for many years. While we all appreciate him offering to doing this, one of my brothers and his wife seem strangely reticent about including them in the deal, because of the "increased risk of being sued by all the whacky or conniving tenants who are out there these days etc.,

Would greatly appreciate hearing other landlords views on this risk - and any other similar negatives.

Wow! I am already a co trustee on a revokeable real estate trust. And I am going to look into the cost of much increasing my liability insurance? Any idea what this would cost a 60 year old woman?

I think insurance doesn't go by your age but the value and conditions of the buildings perhaps. My parents put properties in a trust for inheritance tax purposes, at my request, even though, at the time, there was no inheritance tax for children in NJ. But I have always been intuitive and Lo and behold, when mom passed, some bad governor had legislated inheritance tax for children. The trust saved my butt. As it was I had to pay $37000 dollars on those properties that were not in the trust.

A trust is an entity all by itself. If someone was going to sue it would be suing the trust itself, not you. Though I have heard an expression called "piercing the veil" with regard to suing the beneficiaries of a trust.

Someone will have to run the buildings making sure they are maintained etc. Trustees have to sign checks to pay for things like taxes, maintenance etc. Unless you hire a manager for the buildings, you are going to be landlording unless the beneficiaries do the work. I did the work as beneficiary.

My sister and I looked into one recently. On another legal web site a well respected one] there was a post on just this topic.

Sid was right...the only thin that a revocable trust helps you do is to remain "private" concealing ownership by the casual looky loo. Many lawyers in the case of an event could pierce the veil pretty quickly.

From the site I visited they too advocated the large insurance policy.

A good local TRU

ST ATTY. will cost more than a coupla bucks but buying their knowledge can be priceless

Very interesting comments Frank!

Do you recall the website you referred to?

Thanks

Trustee and beneficiary are two different things, you can be one and not the other or both or part of both or neither. The beneficiary will get the proceeds of the trusts, the trustee makes the decisions to keep the trust going and signs necessary papers etc until the trust is dissolved, usually upon death of those that set up the trust or the beneficiary is of certain age etc.

In my experience, you only want one trustee. That trustee will have to make the decisions, sign the checks etc. More than one person could be a nightmare if they are not easily available to sign documents or checks OR if they disagree with doing something. Certainly if one brother does not want to do this, they should not. Pick one. All three of you could still be beneficiaries though. Either equal or percentage beneficiaries.

If you keep the trust in your dad's name, then you can have a step up basis and start to re-depreciate and have great tax savings on the income. And the spouse's can be excluded and pass the properties to your children so if you spouse remarries, you kids won't be left in the cold.

we are setting up an entity for a family owned property. I've watched for 60 years the "wrong" way it was owned and managed.

Attorney is pushing for a family partnership ... there is A LOT involved in the decision making process of trusts, partnerships, llc, etc.