Thank you for your question and it is a good one. There is some debate as to which vehicle is best to accomplish the goals of preserving the family cabin and my take on it is that it depends on what the family wants.

The LLC offers “perpetuity” which means it can go on conceivably forever and this is important to some families that want a multi-generational legacy property. The trust does not offer perpetuity and in MN no trust can last forever. However, I am not convinced that perpetuity is a valid concern for most families and after explaining to them what happens to the interests over time, it appears less and less appealing to the families I discuss this with.

There is some creditor protection that the LLC is meant to help with, but the spendthrift provisions of the trust also offers protection. Therefore, depending upon how important this is to the family, we may choose and LLC or a trust. Another difference is expense. A trust is generally less expensive as an option and when the family realizes that they accomplish virtually all of the same goals, then cost should be a variable to consider.

The fact is either option will work and I use both. However, to me personally, this is an estate problem, not a business problem and therefore it feels more natural for me as an estate attorney to deal in this arena. However, whether to use an LLC or a trust will depend on what the individual family wishes are.

Joel P. Mullen
Mullen Law Firm, P.A.

You mention the use of an LLC as an alternative to the use of a Trust as the vehicle of choice for controlling, administering and distributing interests in the “cabin”. I assume you use a trust as the vehicle. Why a trust over an LLC? In your opinion, what are the pros and cons of each? Thanks. Ray