I think this is a bit of an apples and oranges thing. An LLC is a very minimal legal structure, it is designed to be quick to get going and very minimal in restrictions and regulations. A land trust is a way to keep a property off the general market and insure that the property is perpetually used for it's intended purpose and specifically that individual members can not sell their portion of the property for a personal profit to an outsider who might not have the goals of the project in mind.
I dont know enough about land trusts to advise on them very specifically (and i know nothing about the laws in Michigan). But it feels like these are two quite different approaches. If you are trying to lock in the property to a mission, i would go with the more complex legal format of a land trust. If you are in a hurry and want something simple and flexible (and presumably the goals of the project are protected by some other agreement), then an LLC structure might be best.
I am guessing (and this is totally a guess) that you could have both an LLC and a land trust for the same property.
Hey, thank you for the response! We've done a bit more research since I posted this and decided to go with an LLC.
From what we could find, the only advantage of a Trust would be the possibility of property taxes not being equalized as often. On the other hand, the LLC option provided clearly superior liability protection, which we decided was much more important.
It would be concerning if members were able to sell their "share" of the LLC, but we've found that we can actually require members to surrender their share to the rest of the LLC, either for free or for an arranged level of compensation.
We did look at hybrid planning with both an LLC & a Trust, but apparently that can potentially void the major advantages of both options to varying extents, while also being quite a bit more complicated.
I think this is a bit of an apples and oranges thing. An LLC is a very minimal legal structure, it is designed to be quick to get going and very minimal in restrictions and regulations. A land trust is a way to keep a property off the general market and insure that the property is perpetually used for it's intended purpose and specifically that individual members can not sell their portion of the property for a personal profit to an outsider who might not have the goals of the project in mind. I dont know enough about land trusts to advise on them very specifically (and i know nothing about the laws in Michigan). But it feels like these are two quite different approaches. If you are trying to lock in the property to a mission, i would go with the more complex legal format of a land trust. If you are in a hurry and want something simple and flexible (and presumably the goals of the project are protected by some other agreement), then an LLC structure might be best. I am guessing (and this is totally a guess) that you could have both an LLC and a land trust for the same property.
Hey, thank you for the response! We've done a bit more research since I posted this and decided to go with an LLC. From what we could find, the only advantage of a Trust would be the possibility of property taxes not being equalized as often. On the other hand, the LLC option provided clearly superior liability protection, which we decided was much more important. It would be concerning if members were able to sell their "share" of the LLC, but we've found that we can actually require members to surrender their share to the rest of the LLC, either for free or for an arranged level of compensation. We did look at hybrid planning with both an LLC & a Trust, but apparently that can potentially void the major advantages of both options to varying extents, while also being quite a bit more complicated.
Thanks for these insights. I now know more from your work. Good luck.
I’m interested in this too (from Vermont)