Roseville, CA estate planning & probate attorney R. Keenan Davis talks about whether you should put your corporation into your trust. He explains that the simple answer to whether corporate shares or LLC ownership interests can be placed into a trust is “no,” but, in typical lawyer-like fashion, he quickly adds that the situation is more nuanced. The corporation itself does not go into a trust; rather, ownership is represented by shares in a corporation or by ownership interests in a limited liability company (LLC). These shares or ownership interests—the formal evidence of ownership—can, in fact, be transferred into a trust, and doing so is entirely reasonable.

He emphasizes that a trust typically includes a Schedule A, which lists all the assets it holds. If a corporation or LLC represents a significant portion of one’s assets, including the ownership interests of that entity in the trust is appropriate. However, he cautions that this decision depends on whether the entity is adequately capitalized. If the corporation or LLC does not have sufficient assets to cover its liabilities, a court can potentially grant access to additional assets in the event of litigation.

He notes that this is precisely why lawyers and clients must examine these matters in detail. Transferring shares into a trust is generally advisable if the entity is properly capitalized, the corporate or LLC formalities are respected, and there is no misuse of funds—such as withdrawing corporate money for personal purposes. Furthermore, having adequate insurance coverage provides an additional layer of protection. When these conditions are met, placing the ownership interests into the trust is a prudent strategy for managing and safeguarding corporate assets.