Should You Buy That Trophy Home in an LLC or a Trust?
Buying a luxury home in South Florida isn’t just a lifestyle decision—it’s a strategic financial move. And when the purchase price reaches seven or eight figures, how you hold the title matters as much as the waterfront view. One of the biggest questions high-net-worth buyers ask is whether to take title in the name of a limited liability company (LLC) or a trust.
Both options offer different benefits depending on your priorities: liability protection, privacy, estate planning, or tax considerations. But the wrong choice can cost you time, money, and even legal protections. Before you close, it’s important to understand what each structure actually does—and does not—offer.
What to Know About LLC Ownership
An LLC is often used to hold investment properties or second homes because it provides a clear layer of liability protection. If someone is injured on the property—say, during a renovation or private event—they would sue the LLC, not you personally. That protection is strongest when the LLC has more than one member and is structured properly. A single-member LLC, especially one that’s treated as a disregarded entity, may not provide the same shield.
Another advantage of an LLC is flexibility. Ownership interests can be transferred or sold more easily than with a trust. Forming and managing an LLC is relatively simple, especially for buyers who already operate other properties or businesses under LLCs.
But there are drawbacks. LLCs don’t qualify for the homestead exemption in Florida, which means you could lose significant property tax savings. You may also forfeit capital gains exemptions when you sell the home, which could impact your overall tax position.
How a Trust Can Benefit Luxury Homeowners
A trust may be better if your goal is long-term estate planning. A properly drafted trust avoids probate, which means the property passes smoothly to your beneficiaries without the delays or costs of court involvement. Unlike an LLC, a trust can also claim Florida’s homestead exemption, which helps reduce property taxes and provides creditor protection for your primary residence.
Trusts do come with more complexity. They can include specific terms about how the property will be used, who has access, and what happens if those terms aren’t followed. Once a property is placed in a trust, changing ownership isn’t as simple as swapping out members of an LLC. Depending on your long-term intentions, that can be a benefit or a drawback.
Another consideration is capital gains. When property is held in a trust, your heirs may receive a step-up basis, which helps minimize taxes if they sell the home later. That step-up is not available when an LLC owns the property.
Before you decide how to hold title to your luxury home, speak with a qualified real estate attorney who can review your goals and tailor the right approach. Every situation is different—what works for one buyer may not be right for another. That’s why we say you should Never Close Alone.
Contact the Law Offices of Jacqueline A. Salcines, PA, today for personalized guidance and legal protection when buying or selling luxury real estate in South Florida.
