[WSBARP] [WSBAPT] In active LLC - transfer of real property to living trust

Fri Oct 30 11:13:25 PDT 2026

Diane,

I always hear from clients that they either heard from other friends, or google lawyers or read online some place  that trusts and LLC’s protect assets.  I then tell them the only way to protect your assets from creditors is to put the assets into an irrevocable trust, that they cannot be a trustee of, and then must wait at least five (5) years before creditors will be barred from seeking to recover the trust assets.  That usually ends the story.  We then discuss LLC’s as protecting assets.  I tell them maybe, but if you, the client, have an LLC that they control as members and they incur a debt, if I get a judgment against you, I will attach your LLC member units and seek to liquidate the LLC and get at assets.  I am actually seeing this being done right now in a local case.  The bottom line is to advise clients to get doing their own research.

Jeff 

W. Jeff Davis

BELL & DAVIS PLLC

Attorneys at Law
P.O. Box 510

720 E. Washington Street, Suite 105
Sequim WA 98382
Phone: (360) 683.1129 
Fax: (360) 683.1258 
email:  <mailto:jeff at bellanddavispllc.com> jeff at bellanddavispllc.com
 <http://www.bellanddavispllc.com/> www.bellanddavispllc.com

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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Diane Kiepe
Sent: Friday, October 30, 2026 9:51 AM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] [WSBAPT] In active LLC - transfer of real property to living trust

Thank you so much for this.  This week alone, three people talked to me about setting up trusts "to protect their assets".  I have to explain to them that what they hear at some free dinner or on some show isn't applicable in WA.  I can't speak for other jurisdictions known for their approach to trusts but I am amazed at how far people are willing to go.  I then discuss the homestead exemption (which is typically the address they are asking about.  

Thank you.

Diane Kiepe, J.D., LL.M. Taxation

Kiepe Estate and Probate, PLLC

diane at kiepelaw.com <mailto:diane at kiepelaw.com> 

200 N. Mullan Rd., Suite 203

Spokane Valley, WA  99206

509-808-2087

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On Fri, Oct 30, 2026 at 9:23 AM Mark McClure, J.D. - McClure Law Group <mark at mcclurelawgroup.com <mailto:mark at mcclurelawgroup.com> > wrote:

Bankruptcy perspective:  Revocable Living Trusts are great; but the homestead in this state only applies to property owned by the debtor that the debtor lives in, intends to live in, or has dependents living in.  And, assets in a revocable trust are accessible by trustor’s creditors.  

While a good argument can be made that the beneficiary of a trust living in a property that is in the trust, should be able to claim that homestead, it is not explicit in the code nor is there any good case law that I am aware of in this state.

Reminder, in King County, the homestead exemption this year is $940,000. 

I recommend to my clients that they move the homestead out of the trust before filing.  There is another gotchya though. The 1,215-day rule, which is a federal statutory cap under 11 U.S.C. § 522(p) of the U.S. Bankruptcy Code.  This is how long if a client wanted to be uber safe would wait after that transfer to file the bankruptcy.

Again, there are good equitable beneficial title arguments to be made, but what one bankruptcy judge may buy, another may not.

Mark C. McClure | Managing Attorney 
Law Office of Mark McClure, PS 
"Why Retire With Debt?"
1103 West Meeker Street, #101 <https://www.google.com/maps/search/1103+West+Meeker+Street,+%23101+Kent,+WA+98032+Office:%C2%A0+253?entry=gmail&source=g> 
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From: wsbapt-bounces at lists.wsbarppt.com <mailto:wsbapt-bounces at lists.wsbarppt.com>  <wsbapt-bounces at lists.wsbarppt.com <mailto:wsbapt-bounces at lists.wsbarppt.com> > On Behalf Of Eric Nelsen
Sent: Friday, October 30, 2026 9:12 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com <mailto:wsbapt at lists.wsbarppt.com> >; 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com <mailto:wsbarp at lists.wsbarppt.com> >
Subject: Re: [WSBAPT] In active LLC - transfer of real property to living trust

The transfer should be done by the persons authorized to dissolve and wind up the LLC. If it’s member-managed, then a deed from all members would probably do it—but need to read the LLC’s Operating Agreement and the statutes. See RCW 25.15.297.

Sincerely,

Eric

Eric C. Nelsen

Sayre Law Offices, PLLC

1417 31st Ave South <https://www.google.com/maps/search/1417+31st+Ave+South+Seattle+WA+98144-3909?entry=gmail&source=g> 

Seattle WA 98144-3909 <https://www.google.com/maps/search/1417+31st+Ave+South+Seattle+WA+98144-3909?entry=gmail&source=g> 

206-625-0092 <tel:(206)%20625-0092> 

 <mailto:eric at sayrelawoffices.com> eric at sayrelawoffices.com

From: wsbapt-bounces at lists.wsbarppt.com <mailto:wsbapt-bounces at lists.wsbarppt.com>  <wsbapt-bounces at lists.wsbarppt.com <mailto:wsbapt-bounces at lists.wsbarppt.com> > On Behalf Of Jeff at bellanddavispllc.com <mailto:Jeff at bellanddavispllc.com> 
Sent: Friday, October 30, 2026 9:04 AM
To: 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com <mailto:wsbarp at lists.wsbarppt.com> >; 'WSBA Probate & Trust Listserv' <wsbapt at lists.wsbarppt.com <mailto:wsbapt at lists.wsbarppt.com> >
Subject: [WSBAPT] In active LLC - transfer of real property to living trust

Listmates:

For estate planning purposes, PC and siblings transferred rental real property into an LLC.  After covid and the new landlord-tenant act, the property was taken out of the rental pool and one sibling bought out.  The other siblings let the LLC license lapse.  Now the remaining members want to transfer the property to a Trust.  Can the remaining members sign a deed on behalf of the LLC and transfer insurable title to a newly formed trust?

Jeff Davis

W. Jeff Davis

BELL & DAVIS PLLC

Attorneys at Law
P.O. Box 510

720 E. Washington Street, Suite 105 <https://www.google.com/maps/search/720+E.+Washington+Street,+Suite+105+Sequim+WA+98382?entry=gmail&source=g> 
Sequim WA 98382 <https://www.google.com/maps/search/720+E.+Washington+Street,+Suite+105+Sequim+WA+98382?entry=gmail&source=g> 
Phone: (360) 683.1129 <tel:(360)%20683-1129>  
Fax: (360) 683.1258 <tel:(360)%20683-1258>  
email: jeff at bellanddavispllc.com <mailto:jeff at bellanddavispllc.com> 
 <http://www.bellanddavispllc.com/> www.bellanddavispllc.com

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