How to Pass Down Commercial Real Estate to Future Generations

Author Elena Mialik Read bio
Date: April 24, 2023

Passing down commercial real estate investments to future generations is an amazing way of ensuring that your hard work and dedication pay off, not just in the short term but for many years to come.

At its core, generational wealth transfers should be managed efficiently so as to limit taxes, liability risks and capital gains when passing away or selling these properties on behalf of the family.

Here are some important tips on how you can maximize returns while minimizing any foreseeable issues while passing such a valuable asset into the next generation’s hands.

Understand the Tax Implications of Passing Down Commercial Real Estate

When it comes to passing down commercial real estate, many people may not be aware of the tax implications that come with it. It’s important to understand the tax laws and regulations before making any decisions. 

Depending on the value of the property, there may be estate taxes that need to be paid, and there could be capital gains taxes if the property increases in value over time. In addition, there may also be ways to minimize the tax burden, such as using trusts or gifting strategies. 

It’s crucial to do your research and seek advice from a tax professional to ensure that you make the best decision for your situation.

Establish a Transferable Entity to Pass Down Commercial Real Estate

As a commercial property owner, one of the most important decisions you may make is to establish a transferable entity to ensure the smooth passing down. 

Doing so not only helps to simplify the complex web of legal and financial regulations surrounding property ownership, but also ensures that your hard work and investment continue to have a positive impact well into the future. 

By creating a transferable entity, you can help your heirs avoid costly estate taxes and potential disputes over the inheritance of the property. With the right planning and guidance, establishing a transferable entity can be an effective way to protect your real estate investments for generations to come.

Golden Gate Bridge in San Francisco

Draft a Comprehensive Will and Estate Plan

Passing down properties can be a daunting task, but it’s important to have a comprehensive will and estate plan in place to ensure that your property is taken care of as you desire. With a well-drafted plan in place, you can avoid potential disputes between family members or business partners, and make sure that your legacy is left in capable hands. 

A thorough will and estate plan can also help to minimize taxes and other expenses, so that your assets can continue to support your loved ones even after you’re gone. By taking the time to carefully plan and document your wishes, you can have peace of mind that your commercial real estate will be responsibly managed and used to benefit future generations.

Create a Timely Execution Plan for Transferring the Property

Without a well-thought-out plan, the inheritance of commercial property could be fraught with legal, tax, and financial implications. Therefore, creating a timely execution plan for transferring commercial property to the next generation is essential. It is imperative to consider factors such as market conditions, tax implications, ownership structure, management succession, and family dynamics.

By taking a strategic approach and involving the right professionals, a timely execution plan can ensure a smooth and successful transfer of commercial property to future generations. It is about preserving family wealth and creating a legacy.

Utilize an Experienced Broker for Selling the Property

If you’re thinking about selling your commercial real estate property, it’s important to work with a broker who has a track record of success. That’s where IPG comes in. Our team of experts has years of experience in the industry, and we know exactly what it takes to successfully market and sell commercial properties.

Selling a property can be a complex and time-consuming process, but with our help, you can rest assured that you’ll achieve the best possible outcome. So why wait? Contact IPG today to learn more about how we can help you sell your commercial real estate property.