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What type of contract, company or trust should I use for a construction?

My husband and I own a design studio in San Diego and we have other two persons who are interested in building 4 residential units. One of them own the property, the second is placing cash and we, as a thrid part, are placing the design of the homes as value. We were thinking in creating an LLC but someone recommended a trust as we could take advantage of the one time fee and no taxing on later years. I am struggling now as what kind of trust. I am kind of lost.

1 reply

Dec 17, 2019

Admittedly, I'm no expert on how to start up a California construction business or how to manage assets via trusts. However, reaching out to one of these California Construction Payment Experts might be helpful since they may have more experience in that department. With that being said, if the agreement will only be in place for a single project, and if no ownership of the underlying property will be changing hands, then it might not be necessary to create an entirely new business entity. Rather, drawing up an agreement between the parties for the allocation of costs, liabilities, revenues, etc. might be more appropriate. Though, if each party would be obtaining some ownership interest in the property, or if the parties would be bound together for a number of years, then creating some structure - such as a trust - may be necessary. Finally, here are some resources that might be helpful: - Choosing a legal entity for a new California construction business | Last & Faoro - Starting a Construction Company in California – Choosing the Best Business Structure | Gale & Vallance - Is a California LLC or Living Trust Better For Asset Protection? | Melissa C. Marsh

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