[WSBARP] Transferring Property to Family Corporation

[Drayna, Paul S.]

Yes the LLC is the grantee. This is exempt from excise tax as long as there is no change in beneficial ownership (i.e. if ownership before was 50/50 as H&W, then ownership in LLC must also be 50/50). Note however that 12 U.S. Code § 1701j-3 <https://www.law.cornell.edu/uscode/text/12/1701j-3> does not provide preemption of due on sale clauses for a transfer into an LLC, so if they have any loans currently secured by the property where the loan documents contain due on sale provisions, they might want to ask the lender's consent to the transfer first. Lenders routinely grant consent in these situations, sometimes requiring some nominal fee to update the loan documents.

Paul S. Drayna | Helsell Fetterman LLP
Attorney | Of Counsel
800 Fifth Avenue, Suite 3200
Seattle, WA 98104
Direct: 206.689.2177
pdrayna at helsell.com<mailto:pdrayna at helsell.com>
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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Jeff at bellanddavispllc.com
Sent: Thursday, April 10, 2025 11:52 AM
To: 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com>
Subject: [WSBARP] Transferring Property to Family Corporation

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H & W plan to transfer their home into an LLC they just formed.  Do I just name the LLC as Grantee?  If it was a trust I would name H & W as Trustee for the H & W Living Trust dated _____.

Jeff Davis

W. Jeff Davis
BELL & DAVIS PLLC
Attorneys at Law
P.O. Box 510
720 E. Washington Street, Suite 105
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