Farm Progress

Country Counsel: Establishing an LLC and using it to transfer land can keep an individual’s name private.

March 23, 2017

4 Min Read
PRIVATE: If privacy is important, there are ways to minimize the impact of public information by following some simple strategies.BernardaSv/iStock/Thinkstock

By Robert Moore

Some information is required by law to be made public, such as recording of deeds and filing of wills with the probate court. However, there are ways in which to minimize the impacts of this public information. If privacy is important, the following strategies can help.

Every deed must be recorded with the county recorder. The recording makes the deed a public document. For every parcel in a county, you can determine the owner of each parcel and all prior owners by reviewing the recorder’s records, some of which are on the internet. This also applies to all parcels that you transfer. This may be problematic if you would like to transfer land without others finding out.

Transferring land privately can be important for intra-family transfers or transfer to third parties that may cause dissent in the community. For example, Farmer Bill wants to transfer land to a child as part of his estate planning. However, he does not want others in his family or neighbors to find out he has transferred the land. If he transfers the land by signing and recording a deed to the child, the deed will become public information (and may be published in the local newspaper).

To avoid the public transfer, Farmer Bill can set up an LLC and transfer the land to the LLC. The only public information required for an LLC is the name of the LLC and a contact person and address. Farmer Bill sets up an LLC named Ohio Farms LLC and has his attorney be the contact person. This prevents anyone from knowing the owner of Ohio Farms LLC. Farmer Bill then executes a deed to Ohio Farms LLC. The only thing that can be determined from this deed is that Farmer Bill transferred the land to the LLC. Then Farmer Bill can transfer the ownership of the LLC to the child. Transferring ownership in an LLC is not public. Using this method, Farmer Bill can transfer land to the child (or anyone else) without the transfer being public. Consider using an LLC if you would like to transfer land in a private manner.

Wills and estates
Wills are also notorious for being public documents. If you know someone who passed away and their estate was administered through a will, you can go to the county probate court and ask for the estate file. You will be able to see the will, inventory of assets with values and to whom the assets were transferred. Some people wish to keep their assets and heirs private even after death.

Estates can also be kept private. One way is through the use of trusts. A trust is a document that transfers assets to heirs and beneficiaries at death but is not public. A trust is administered by a trustee rather than the probate court.

Transfer on Death (TOD) and Payable on Death (POD) designations will also transfer assets privately. TOD designations can be used on titled assets like vehicles, trailers and business entity ownership. POD designations can be used on assets like bank accounts and financial accounts.

For example, Farmer Joe owns farm machinery, land, a bank account and an IRA. He wants to keep his estate private when he dies. He can set up a trust to transfer the machinery. Upon his death, the farm machinery will go into his trust. His trustee will read the trust and distribute the machinery to the identified beneficiary. His land can be transferred through an LLC with a TOD designation as discussed above. Farmer Joe can add a POD designation to his bank account. The POD beneficiary can take the death certificate to the bank and receive the funds. Lastly, Farmer Joe can include a beneficiary on his IRA, which will be transferred privately when a death certificate is presented to the financial institution.

As the examples illustrate, assets can be transferred during life and through an estate with minimal public information. If this is an issue for you, seek legal advice to determine the best strategy for you. The law provides ways for you to transfer your assets and maintain privacy.

Moore is an attorney with Wright & Moore Law Co. LPF. Email him at [email protected] or call 740-990-0750.

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