Dr. Mehment Oz is involved in a legal dispute with his sister, Nazlim Oz, over rental income from two New York City properties owned by their late father.
According to the legal complaint filed by the sister, the Good Doctor stopped her share of the rental profits from the properties, currently held in a limited liability company and managed by Dr. Oz. As we can imagine, this is only the tip of the iceberg and there are other ongoing legal proceedings over the final distribution of their father’s estate both in the US and Turkey, their country of origin. Funnily enough, this is the reason Dr. Oz gave for the stopping of the rental payments to Nazlim. According to Dr. Oz, the family is currently in a disputed probate.
There’s not enough information available for us to know if Dr. Oz is properly (or improperly) withholding payments, but there’s plenty for us to discuss!
So, what can we learn from this family dispute involving real property held in an LLC?
We all know my deference to holding real property in a land trust versus an LLC. I won’t go on and on (as I do) about a land trust today. I will, however, discuss how an LLC and a trust can work together.
Contrary to popular opinion, I don’t hate LLCs, they can be a very useful tool (yearly Sunbiz payments and all lol) and if a property is ALREADY held in the name of an LLC, it’s often a good idea to keep the property in the LLC and leverage the use of a trust.
How, you might ask? Well, we can create (or amend) an operating agreement to show that a minor interest is held by the trustee of the trust. We would have a beneficiary clause in the operating agreement to create a mechanism where at the death of a member(s), their interest will transfer the remaining beneficiary, THE TRUST. This is an easy way to avoid probate and have the LLC ownership flow into the trust at the member(s) death. Nothing needs to be updated in Sunbiz, the LLC operating agreement is a very private document and does not get recorded or filed anywhere. This is the document that controls the LLC and can outline the members’ interests and management.
As always, it’s never a good idea to rely on a blog for legal advice (even my awesome blog) so if you’re curious about your LLC with real property, give us a call or shoot us an email. We can see if this LLC/Trust ownership style makes sense for your unique situation.
To summarize, we actually learn two things from Dr. Oz. We learn that an LLC can work nicely with a trust and that everyone has a unique estate plan based on their unique circumstances.
Call with any questions, we’re here!