The Three Structures at a Glance
| Risk |
Personal Name |
LLC Only |
Trust Only |
LLC + Trust |
| Tenant lawsuit reaches personal assets |
Yes — full exposure |
No — LLC is separate entity |
Yes — O.C.G.A. § 53-12-82(a)(1) |
No — LLC shields personal assets |
| Probate at death |
Yes — 6–18 months |
Yes — LLC interest goes to probate |
No — trust bypasses probate |
No — trust owns LLC, bypasses probate |
| Property frozen at incapacity |
Yes — conservatorship required |
Yes — no automatic succession |
No — successor trustee steps in |
No — successor trustee controls LLC |
| Each property liability isolated |
No |
Yes — one LLC per property |
No |
Yes — one LLC per property |
| Distribution control at death |
Limited — will only |
No |
Yes — trust terms govern |
Yes — trust terms govern |
| Setup cost |
$0 |
$100 GA filing fee + attorney |
$3,500–$6,000 attorney |
Combined — single engagement |
Holding in Personal Name — Full Exposure on All Three Fronts
Most Georgia investors start here. They buy a rental property, title it in their name, and move on. No formation costs, no paperwork beyond the deed. It is the path of least resistance — and it leaves the investor exposed on every dimension that matters.
At death: Real property titled solely in the owner’s name requires full Georgia probate administration. The executor is appointed by the Probate Court, must collect all assets, manage any outstanding obligations, and may need court permission to sell real property under O.C.G.A. § 53-8-13. Under O.C.G.A. § 53-6-60, the executor earns 2.5% of all cash received plus 2.5% of all cash paid out — effectively 5% of all cash moving through the estate — plus 10% on interest earned and up to 3% on property delivered in kind. For a $400,000 rental property with a $1,500/month tenant, that is a meaningful cost on top of 6–18 months of locked rental income during administration.
At incapacity: If the owner suffers a stroke or becomes cognitively impaired, no one can manage, lease, repair, or sell the personally held property without a court-supervised conservatorship under O.C.G.A. § 29-5-1. The conservatorship requires annual verified returns to the probate court and attorney involvement for any significant transaction. This can take months to establish and costs thousands in legal fees before anyone can collect a rent check.
During ownership: A tenant who wins a personal injury judgment against a landlord holding property in personal name can reach all of the owner’s personal assets — home, savings accounts, vehicles, other properties. There is no entity separating the rental property liability from the owner’s personal estate.
What a Georgia LLC Adds — and What It Does Not Solve
A Georgia LLC formed under O.C.G.A. § 14-11-301 is a separate legal entity. The owner’s personal assets are not automatically reachable from a judgment against the LLC, provided the LLC is maintained as a genuine separate entity. This is the liability protection that personal name ownership lacks entirely.
Under O.C.G.A. § 14-11-303, members are not personally liable for the LLC’s obligations solely by reason of being a member. A tenant who wins a judgment against the LLC can reach only the LLC’s assets — the rental property, the LLC’s bank account. Not the owner’s home. Not other properties held in separate entities.
What an LLC does not solve:
Probate. An LLC membership interest is a personal asset. When the owner dies, that interest passes through probate exactly like any other personal property unless a trust or beneficiary designation controls it.
Incapacity. An LLC operating agreement can name a successor manager, but if the operating agreement is not current, has never been signed, or does not address incapacity clearly, the succession mechanism may not activate without court involvement.
Intra-portfolio isolation. Holding multiple properties in one LLC means a judgment from one property can reach all assets in that LLC. An investor with four properties in one LLC has no separation between them. One LLC per property is the standard structure for Georgia investors who want intra-portfolio liability separation.
The LLC’s protection is also conditional: Georgia courts pierce the LLC veil under the alter-ego doctrine established in Acree v. McMahan, 276 Ga. 880 (2003) and Pazur v. Belcher, 290 Ga. App. 703 (2008). Commingling personal and business funds is the primary trigger. An LLC whose rent deposits go into the owner’s personal account is a lawsuit away from losing its liability protection entirely.
What a Revocable Trust Adds — and What It Does Not Solve
A revocable trust avoids probate entirely for all funded assets. Property titled in the trust passes directly to the named beneficiaries under the trust terms — no court, no executor, no 6–18 month wait. The successor trustee steps in at incapacity without any court proceeding, using a two-physician certification or the mechanism specified in the trust document.
These are the problems the LLC does not solve. The trust solves them completely.
What a revocable trust does not solve:
Liability protection. Under O.C.G.A. § 53-12-82(a)(1), property held in a revocable trust is “subject to claims of the settlor’s creditors” during the settlor’s lifetime, regardless of any spendthrift provision. A tenant who wins a judgment against a Georgia landlord can reach trust-held property as if the trust did not exist. The revocable trust is legally transparent to creditors.
An investor who places all their rental properties in a revocable trust and believes they are protected from tenant lawsuits has solved the wrong problem. They have eliminated probate — which was not their most urgent risk — while leaving every property fully exposed to the liability claims that happen during their lifetime.
Why LLC + Revocable Trust Is the Recommendation for Georgia Investors
The LLC addresses the risks the trust cannot. The trust addresses the risks the LLC cannot. Neither structure alone closes the full gap — the combination does.
The standard structure for a Georgia investor with two or more rental properties:
- Each property in its own LLC. One LLC per property. Each LLC has its own bank account, its own operating agreement, and holds title to one property. A judgment on Property A cannot reach Property B.
- The revocable trust owns the LLC interests. The trust holds the membership interest in each LLC. At death, the LLC interests pass through the trust without probate. At incapacity, the successor trustee steps in as the controlling member of each LLC.
- The trust does not hold the properties directly. The LLC holds the property. The trust holds the LLC. This preserves the LLC’s liability protection — the trust’s ownership of the LLC interest does not compromise the LLC’s separate entity status.
The cost of this structure is higher than either option alone — LLC formation plus a revocable trust engagement. Georgia LLC filing fees are $100 per entity with the Secretary of State, plus attorney fees for the operating agreement and deed transfer. A revocable trust typically costs $3,500–$6,000 in Georgia depending on complexity. For an investor with three properties, the total structure cost compares favorably to a single probate proceeding — which would cost more in executor commissions alone.
For the complete breakdown of how this structure is implemented, see Best Way to Hold Rental Properties in Georgia for Estate Planning.
