Should You Hold US Property in an LLC or Your Name?

If you bought a property in the US for around $400,000 and put it in your own name, you made the mistake almost everyone makes. It looks normal. The agent did not stop you. The closing went through. Nobody mentioned what happens next.

What happens next is two problems. Neither one shows up until it is too late to fix cheaply.

The first problem arrives the day you die

An American citizen can pass on about $15 million before the government takes a cent. You are not a citizen, so you do not get that. You get $60,000. Everything above $60,000 is taxed, and the rate climbs to 40 percent.

Do the math on that $400,000 house. Take away the $60,000 that is exempt. The tax on what is left comes to about $108,800. More than $100,000.

This bill comes due fast. Your family has to pay it within months, in cash, before they can sell the house, rent it, or even change the locks. They write a six-figure check to a government that never had anything to do with them, only because the house was in your name.

The second problem does not wait for you to die

While the house is in your name, your name is on the public record. Anyone can look it up and see what you own. If someone sues you in the US, a slip on the stairs, a business dispute, a car accident, their lawyer goes straight for your personal assets, because you are the owner on paper. You and the house are the same thing in the eyes of the law. Nothing stands between them and everything you have.

You fix both by taking your name off it

Step one is an LLC. You move the property into a company, and your name disappears from the public record. Someone searching finds a company, not you. If a lawsuit comes, it hits the company, not your personal savings. That costs almost nothing, around 0.25 percent of the value, about $1,000 on a $400,000 house.

Now I am going to be straight with you, because this is the part nobody explains. The LLC fixes the lawsuit problem. On its own, it does not touch the 40 percent tax.

What removes the tax is a second layer, above the LLC: a foreign company that owns the LLC. That upper layer is what keeps the 40 percent away from your family. Two problems, two pieces. The LLC underneath, for privacy and lawsuits. The company on top, so your heirs inherit the house instead of the tax bill.

None of this is hidden. It is just never brought up, because the person who sells you the house is not the person who protects your family. The agent closes the deal. The accountant files where you live. The one question that saves your family, what sits above the property, is the one almost nobody asks.

There is no sense in leaving things as they are. Same house, same family, same money. The only thing that changes is who keeps what you built.

If you want us to look at your case and set up your LLC with the right structure above it, message us at Leiros Consulting. Out team will handle it.

¹ Cristián Leirós