Indirect ownerships are those in which land is owned by a legal entity rather than by a person.

Ownership Type

Features

Pros

Cons

Limited Partnership

* Formed by agreement.

* At least one general partner required, others may be limited partners.

* Because property is owned by limited partnership, no change in deed at death; instead, partnership interests transfer by will or lifetime gift.

* Limited partnership can exist forever.

* Ownership interest may be transferred without deed.

* Offers liability protection to limited partners.

* Spells out agreement between partners-very flexible.

* More complex.

* Annual reporting to IRS and state.

* General partner does not get liability protection.

* May be annual fee to state.

Trust

* Formed by agreement created by donor, naming trustee and one or more beneficiaries.

* Because property is owned by trust, no change in deed at death.

* State law may limit length of existence of trust.

* Trustee manages for benefit of beneficiaries.

* Usually offers liability protection to beneficiaries and trustee.

* Trust instrument spells out duties of trustee and rights and benefits of beneficiaries.

* No annual fee.

* More complex.

* Annual reporting to IRS and state.

* Income held in trust that is not passed out to beneficiaries likely taxed at higher rate.

Limited Liability Company (LLC)

* Formed by agreement.

* Usually consists of member(s) and manager(s).

* Because property is owned by LLC, no change in deed at death; instead, ownership interest usually transfers by will or lifetime gifts.

* Ownership interest may be transferred without deed.

* Offers liability protection to all members.

* Operating agreement spells out agreement between members--very flexible.

* More complex.

* Annual reporting to IRS and state.

* Annual fee to state.

Center for Private Forests

Address

416 Forest Resources Building
University Park, PA 16802

Center for Private Forests

Address

416 Forest Resources Building
University Park, PA 16802