Estate Planning for Georgia Real Estate Investors Buying Their First Rental Property

What Happens to Your Rental Property If You Die Without a Plan

If you die with a rental property titled in your name — or with an LLC you own — that property does not transfer to your family automatically. Your executor must record a document called an Assent to Devise in the county land records before title can move to your heirs. That document cannot be filed until the probate court closes the estate.

Your family cannot access the rental income during probate. Rent payments must go into a separate estate account. No funds can be distributed to heirs until the court approves a final accounting. If probate takes 18 months, your family waits 18 months.

Your family cannot sell the property without court approval. Even if every heir agrees to sell, the court must authorize the sale. That requires a petition, a court-ordered appraisal, and a hearing.

Your tenants are legally entitled to stay. Existing leases survive your death and bind the estate. Your executor must notify tenants of the change, take over collecting rent, and comply with Georgia’s full landlord-tenant law for any eviction.

• Cost: Georgia probate costs 3 to 7 percent of the estate in attorney fees, executor fees, court costs, and appraisal. On a $300,000 rental property, that is $9,000 to $21,000.
• Timeline: 9 to 18 months for a standard estate with real property. Rental properties with LLCs, multiple heirs, or any dispute run longer.
• Control: Your family cannot collect rental income freely, sell the property, refinance, or make significant repairs without court involvement during the entire proceeding.

LLC, Trust, or Both — What a First-Time Georgia Landlord Actually Needs

An LLC and a trust serve completely different purposes. For most first-time Georgia landlords, you will need both — but they do different jobs.

An LLC (Limited Liability Company) protects your personal assets while you are alive. If a tenant sues over an injury on the property, the lawsuit can only reach what is inside the LLC, not your home, savings, or other assets. The LLC does not protect your family after you die.

A revocable living trust protects your family when you die. It names a successor trustee who steps in the day you die and manages the property without any court involvement. No probate. No delay. No lost rental income.

The most effective structure for a first rental property is an LLC owned by a trust. The trust holds 100 percent of the LLC membership interest. When you die, your successor trustee steps into your role as LLC manager. Your tenants see no disruption. Rent continues. The property can be sold or transferred by the trustee without going to court.

For more detail on how the two structures compare, see LLC vs. Trust for Georgia Rental Properties.

What a Will Does — and Does Not Do for Your Rental Property

A will tells the court who gets your assets after you die. It does not avoid probate. A will still requires your property to go through the full Georgia probate process — 9 to 18 months, court supervision, frozen rental income.

A will cannot name a property manager who takes over the next day. It cannot prevent your heirs from going to court if they disagree about the property. It cannot collect rent during probate.

Only a funded trust allows your successor trustee to step in immediately at your death, without any court proceeding. For a side-by-side comparison, see Revocable Trust vs. Will for Georgia Real Estate Investors.

A will is still part of a complete estate plan — it handles assets not transferred into the trust before you died. But it cannot substitute for the trust when your rental property is the primary asset at stake.

The Georgia Transfer-on-Death Deed — What It Is and When It Applies

Georgia enacted a transfer-on-death deed effective July 1, 2024 under O.C.G.A. § 44-17-1 et seq. A TOD deed lets you name a beneficiary who inherits the property at your death without probate. You retain full ownership and control during your lifetime.

The TOD deed has a specific limitation: the named beneficiary must file an affidavit with the county clerk within 9 months of your death. If the beneficiary misses that deadline, the property reverts to your estate and goes through full probate.

A TOD deed does not help if your property is inside an LLC. It applies to real estate titled in your personal name only. If you follow the recommended LLC structure, the trust owns the LLC membership interest instead, and the TOD deed is not part of the picture.

For first-time landlords who own property in their personal name and want a simpler starting point, a TOD deed can work. But it does not address incapacity, does not protect against Medicaid estate recovery, and does not give you the same control over how and when assets distribute that a revocable trust provides.

The Mortgage Question — Due-on-Sale Clauses

Most rental property mortgages contain a due-on-sale clause. This clause gives the lender the right to demand immediate repayment if you transfer the property to another entity.

Transferring rental property into an LLC may trigger this clause. Some lenders enforce it; others do not. The practical approach is to contact your lender before transferring the deed, or to transfer the membership interest to the trust rather than the property deed itself.

Transferring into a revocable living trust generally does not trigger the clause. The Garn-St. Germain Depository Institutions Act prohibits lenders from enforcing due-on-sale clauses for transfers to a borrower’s own revocable living trust where the borrower remains a beneficiary and retains control.

The structure that avoids both risks: hold the mortgage in your personal name, transfer the property deed into the LLC with lender awareness, and have your trust own the LLC membership interest. The mortgage obligation stays with you, the liability protection comes from the LLC, and the trust ensures probate-free transfer at your death.

How Much Does This Cost for Your First Rental Property

A complete estate plan for a first-time Georgia landlord with one rental property costs $4,000 to $4,550. This includes a revocable living trust, pour-over will, financial power of attorney, healthcare directive, and the deed transfer that puts your property or LLC interest inside the trust.

LLC formation is separate: $100 to file with the Georgia Secretary of State, plus $50 per year in annual registration. An attorney-drafted operating agreement with proper succession provisions adds $300 to $600.

For the full pricing breakdown, see How Much Does Estate Planning Cost for a Georgia Real Estate Investor.

The cost of doing nothing is higher. 9 to 18 months of probate, 3 to 7 percent in estate costs, and zero rental income accessible to your family while the court works through the paperwork. On a $300,000 property, that is $9,000 to $21,000 in probate costs alone, before accounting for the missed rental income during the case. For a full breakdown of what skipping this costs, see The Cost of Having No Estate Plan as a Georgia Real Estate Investor.

For a complete overview of everything a Georgia real estate investor’s estate plan should include, see What Should a Georgia Real Estate Investor’s Estate Plan Include.

What to Do Right Now

Most estate plans for first-time landlords take 2 to 4 weeks to complete. The right time to start is before your first tenant moves in. If tenants are already in place, the right time is now.