In this episode of SoCal Multifamily Insights, we welcomed estate planning attorney Lioness J. Ebbay, to break down an often-overlooked—but absolutely essential—topic for real estate investors: how to protect your assets and pass them on without court interference or excessive taxes.
Whether you own a single rental or a portfolio of multifamily and commercial properties, understanding estate planning is key to building and protecting generational wealth.
Why Estate Planning Matters for Investors
Lioness explained that many investors put off estate planning until it’s too late. That delay can result in probate, unexpected tax burdens, or loss of control over your hard-earned assets.
The foundation of a good plan? A living trust—especially once you acquire real estate or have minor children.
“Once you own even a percentage of real estate, you need a living trust,” Lioness explained.
This isn’t just about millionaires. Even if you own part of a 4-unit building through an LLC, or have a primary residence and a rental, a trust helps ensure that your assets are distributed according to your wishes—and that they avoid the long, expensive, and public probate process.
Living Trusts vs. LLCs: Which One Protects You?
Many investors assume an LLC alone is enough. While an LLC provides liability protection, it’s not a substitute for a living trust.
“You really don’t want all your eggs in one basket,” Lioness emphasized.
An LLC separates personal liability from investment risk—essential for rentals. But a living trust ensures that your heirs receive your assets efficiently and without probate. The two structures serve different purposes and should be used together.
Here’s the ideal structure:
• Primary residence → in your living trust
• Investment properties → in LLCs, which are then held by your trust
This structure gives you protection, control, and clarity—during your lifetime and after.
Special Cases: Children, Life Insurance, and Special Needs
If you have minor children or a life insurance policy, estate planning becomes even more urgent.
Life insurance companies will not pay out directly to minors. Without a trust, that money gets tied up until your child turns 18—and then it’s handed over to them outright, regardless of their readiness.
A trust allows you to:
• Control when and how your children receive money
• Appoint guardians and financial managers
• Create special needs trusts to ensure your child doesn’t lose government benefits
Lioness explained how without proper planning, leaving large sums to special needs children can disqualify them from aid. But a properly structured trust can preserve those benefits while still supporting them financially.
Avoiding Estate Taxes (and What to Know About Prop 19)
One of the top concerns for wealthy investors is minimizing taxes on the transfer of wealth. The good news? Most families don’t need to worry about estate taxes unless their assets exceed:
• $14 million for single individuals
• $28 million for married couples
However, Prop 19 has changed the game in California. Before this law, children inheriting their parents’ properties could often retain the property tax basis and avoid reassessments. Now, only one inherited property can qualify for that benefit—and only if it becomes the child’s primary residence.
So, if you leave behind four apartment buildings to your adult children who already own homes, those properties will likely be reassessed at market value—triggering significant increases in property taxes.
LLCs and Reassessment: A Hidden Loophole?
Lioness mentioned a lesser-known reality: the county doesn’t track LLC ownership changes as easily as they do individuals.
If your trust owns an interest in an LLC that owns a property, and you pass away, your children inherit the LLC interest, not the property itself. This means the county may not reassess the property, potentially saving your heirs thousands annually.
“This is why wealthy families have 50 LLCs,” Lioness joked, “because they understand how to use these entities to protect generational wealth.”
Power of Attorney: The Forgotten Essential
Most people focus only on what happens after they die. But Lioness stressed that your planning needs to cover incapacity, too.
That’s where power of attorney comes in. If you’re in an accident or suffer cognitive decline, no one—not even your spouse—can legally manage your finances unless you’ve assigned a power of attorney.
Lioness shared stories of clients whose spouses had to go through conservatorship court, simply because they didn’t have the right documents in place.
“A marriage certificate isn’t enough. You need proper legal authority to act on someone’s behalf.”
Emergency Case: A Trust Just in Time
One of the most powerful moments in the interview was Lioness’ story about being called to a Long Beach hospital. A woman in her 80s was hospitalized with no trust, will, or power of attorney in place.
Lioness helped her complete all documents, including funding a trust with her home, within two days. A week later, the woman passed away—but her estate avoided probate, and her wishes were honored.
“That’s why I charge emergency fees now,” Lioness said. “People call expecting miracles at the last minute.”
What You Need to Get Started
If you’re a real estate investor, here’s what you need to think about right now:
1. Do you own real estate? → You need a living trust
2. Do you have minor children or special needs dependents? → You need a trust and guardianship plan
3. Do you want to avoid probate? → Trusts prevent court delays and interference
4. Do you own property in LLCs? → Make sure your trust owns your LLC interests
5. Do you have separate financial accounts? → Assign power of attorney now
Lioness also said the hardest part isn’t paperwork—it’s choosing who to trust. Many clients hesitate not over legal forms, but over naming trustees, agents, and successors. So start that conversation early.
Final Thoughts
Estate planning isn’t just for the wealthy—it’s for anyone who owns property and cares about protecting it. The right strategy ensures your assets go to the right people, at the right time, with minimal court or tax headaches.
If you’re a multifamily or commercial real estate investor in California, don’t wait. Whether it’s Prop 19, incapacity planning, or securing your legacy, now is the time to put your plan in place.
Reach out to an estate planning attorney like Lioness to take the first step toward protecting your family and your investments.
How to contact Lioness:
Lioness J. Ebbay, Estate Planning Attorney
- 📞 619-245-5688
- 📧 Attorney@lionesslaw.me
