[WSBAPT] Devising real property owned by LLC

[Nick Pleasants]

Timothy,
I do not think this would fall under "any real property". LLC interests are generally treated as business interests not real property interests, regardless of what the LLC owns.
For estate tax characterization, DOR used to have the "True Business Purpose" test, treating an LLC as real estate if the LLC was just a holding company. But since 2020 they gave up and just went with all LLC's are intangible assets, not real estate. See https://dor.wa.gov/sites/default/files/2022-03/sn_20_EstateTaxTreatment.pdf
DOR's position is not binding on how you interpret the Will, but maybe persuasive...
Best,
Nick


Nicholas Pleasants | Shareholder



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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> on behalf of Timothy Lehr <timothy at stileslaw.com>
Sent: Tuesday, October 29, 2024 8:28 AM
To: wsbapt at lists.wsbarppt.com <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Devising real property owned by LLC


All,



Decedent has a Will which includes a section that devises “any real property that I may own at the time of my death…” to certain beneficiaries. The Will also has a residuary that devises all other assets “whether real or personal…” to certain beneficiaries. The beneficiaries of each section are slightly different.



Decedent owned a fractional share in a family LLC and the LLC owns certain real property. Would decedent’s LLC interest pass via her residuary or pursuant to her provision in the Will devising “any real property” if the main assets in the LLC are real property? My initial thought is because she only owned an interest in the LLC, and the LLC is the owner of the real property, not decedent personally, that the LLC interest passes pursuant to her residuary. But I’m not sure if others have run into this or have thoughts?



Thanks,



Timothy C. Lehr

Attorney & Partner



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