Using a will to give a commercial building to a loved one, a business partner or even a charitable organization is not ideal planning. Adverse tax consequences, the public probate process and operational difficulties aside, the building may not become the property of its intended owner. Example: Sr. writes a will giving a building to Jr. but decides later that his business partner George should get title to the building. As the 1997 New Hampshire case In re Estate of Laura 141 N.H. 628, 690 A.2d 1011 discusses in detail, the application or misapplication of a legal doctrine called Dependent Relative Revocation could result in that will change being:

  • Ignored, leaving Jr. with the building
  • Read to revoke the first Will but not make a valid change, leaving all of Sr.’s heirs holding the building as tenants in common
  • Read to leave the building to George

Few building or business owners are comfortable with this level of uncertainty.  Using trusts, LLCs, and direct transfers while alive provide far more certainty as well as the opportunity for better tax and operational planning.  When deciding who should be the next owner of a building, consult lawyers familiar not only with real estate but with wealth management and planning.   

Topics:  Beneficiaries, Charitable Donations, Charitable Organizations, Commercial Property Owners, Estate Tax, Limited Liability Companies, Non-Profits, Probate, Real Estate Transfers

Published In: Commercial Real Estate Updates, Wills, Trusts, & Estate Planning Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Bernstein Shur | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »