How to protect assets in an irrevocable trust owned property

Level 2
San Diego, CA

How to protect assets in an irrevocable trust owned property

We recently purchased a property we plan on STR-ing that is owned by our irrevocable trust (my wife and I are the trustees). It was done this way to meet the criteria for a 1031 exchange as the previous property was in our trust(a long term rental). I am looking for the best way to run a short term rental business through it with the least amount of liability exposure. Should I create an LLC in the trust's name and re-title the property to be in the LLC's name? Or are we better off just getting a hefty insurance policy and run the business operations through an LLC? The STR property is in Honolulu, Hawaii. I know transferring the title will restart our depreciation and will run the numbers based on that. I do have this question into my tax preparers and my trust attorney but thought I'd ask about your experiences here. Thanks in advance!

2 Replies 2
Level 10
Seattle, WA

@Patrick3085 Assuming the property has some value, minimally any liability would first go after that. So most likely insurance would be good idea.

Community Manager
Community Manager
Suffolk Coastal District, United Kingdom

Hi there @Patrick3085 👋


How have you got on?  What did you decide to do in the end? It would be lovely to hear what you decided. 




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