Systems and methods for conveying common law estates in property using disregarded entities

• US 20030110127A1
• Filed: 04/29/2002
• Published: 06/12/2003
• Est. Priority Date: 12/11/2001
• Status: Abandoned Application

• Current Assignee: Richard J. Sabella
• Original Assignee: Richard J. Sabella
• Inventors: Sabella, Richard J.
• Application Number:
  US10/134,586
• Publication Number:
  US 20030110127A1
• Time in Patent Office: Days
• US Class Current: 705/39
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03

Abstract

Systems, methods, apparatus, mediums and means for creating or transferring the functional and tax equivalent of an interest, particularly a common law estate, in an asset owned by a first entity are provided where the first entity is obligated to obtain consent from a lender or other party if the asset or an interest therein is conveyed to a third party or where the creation or transfer of a common law estate in such asset directly would entail significant cost. A disregarded entity is formed holding the first entity'"'"'s rights in the asset. In lieu of a transfer of rights or a common law estate in such asset directly, there is conveyed rights or such common law estate in the equity interests in such disregarded entity, wherein such transfer does not require any such consent and does not involve the high cost traditionally associated with common law estate transactions.

Claims

1. A method for transferring the equivalent of a common law estate in an asset owned by a first entity, wherein said first entity is obligated to obtain a consent from an interested party if the asset, or a common law estate therein, were directly conveyed to a third party, the method comprising:

forming a disregarded entity holding said first entity'"'"'s rights in said asset;

transferring a common law estate in the equity interests of such disregarded entity to a subsequent purchaser, wherein said subsequent purchaser acquires the equivalent of a common law estate in the asset, and wherein said transfer does not require consent from any interested party.

2. The method of claim 1, wherein said equivalent is a functional and tax equivalent.

3. The method of claim 1, wherein said asset is real property.

4. The method of claim 1, wherein said disregarded entity is a single member limited liability company.

5. The method of claim 1, wherein said interested party is at least one of:

a lender and a tenant.

6. The method of claim 1, further comprising:

converting said first entity into a disregarded entity holding equitable ownership of said asset.

7. The method of claim 1, further comprising forming a second disregarded entity holding all of said first disregarded entity'"'"'s assets;

wherein said transferring comprises transferring all rights from said second disregarded entity to a subsequent purchaser, wherein said transferring does not require consent from any interested party.

8. A method for transferring the equivalent of a common law estate in an asset owned by a first entity, wherein said first entity is obligated to obtain a consent from an interested party if the asset or a common law estate therein were conveyed directly to a third party, comprising:

forming at least a first disregarded entity to hold all of said first entity'"'"'s rights in said asset;

transferring a term of years interest in rights of said first disregarded entity to a first purchaser; and

transferring a remainder interest in rights of said first disregarded entity to a second purchaser; and

wherein said transferring is performed without consent of any interested party.

9. A method for transferring the equivalent of a common law estate in an asset owned by a first entity, wherein said first entity is obligated to obtain a consent from an interested party if the asset or a common law estate therein were conveyed directly to a third party, the method comprising:

forming at least a first disregarded entity to hold all of said first entity'"'"'s rights in said asset;

transferring a term of years interest in rights of said first disregarded entity to a first purchaser;

transferring a remainder interest in rights of said first disregarded entity to a second purchaser; and

transferring a recombination right to said first purchaser allowing said first purchaser to combine said remainder interest with said term of years interest upon payment of an option price;

wherein said transferring is performed without consent of any interested party.

10. A computer-implemented method for transferring a common law estate in an asset or the functional and tax equivalent thereof, comprising:

receiving information identifying said asset or interest;

receiving information identifying at least a first loan secured by said asset or other obligation relating to such asset, said loan or other obligation requiring consent to subsequent transfers of said asset or common law estates therein;

causing the formation of at least a first disregarded entity holding rights to said asset; and

causing to be transferred a common law estate in the equity interests in said disregarded entity that owns such asset to a subsequent purchaser, wherein said transfer of rights does not require any said consent.

11. A computer-readable medium having computer-executable instructions for performing steps comprising:

receiving information identifying at least one of a common law estate in an asset and an equivalent of a common law estate in said asset;

receiving information identifying at least a first loan secured by said asset or other obligation relating thereto, said loan or other obligation requiring consent to subsequent transfers of said asset or interests therein;

causing the formation of at least a first disregarded entity holding rights to said asset; and

causing at least one of a common law estate and an equivalent of a common law estate in the equity interests in said first disregarded entity to be transferred to a subsequent purchaser, wherein said transfer of rights does not require any said consent, wherein said subsequent purchaser acquires at least the functional and tax equivalent of said common law estate in said asset.

13. The computer-implemented method of claim 11, further comprising:

determining, based at least in part on said first term requiring lender or other consent, whether more than one disregarded entities should be established.

12. A computer-implemented method for transferring the functional and tax equivalent of a common law estate in an asset, comprising:

receiving information identifying said asset and rights therein;

receiving information identifying at least a first loan secured by said asset or other obligation relating thereto, said loan or other obligation requiring consent to subsequent transfers of said asset or interests therein;

causing the formation of at least a first disregarded entity holding rights to said asset;

identifying a term of years interest in said rights to said asset or the disregarded entity that owns said asset;

identifying a remainder interest in said rights to said asset or the equity interests in the disregarded entity that owns said asset;

causing said term of years interest to be transferred to a first purchaser; and

causing said remainder interest to be transferred to a second purchaser;

wherein said transfer of said term of years and remainder interests do not require any said consent.

14. A system for causing the transfer of the functional and tax equivalent of a common law estate in an asset, comprising:

means for identifying at least a first loan secured by said asset or other obligation relating thereto, said loan or obligation including a first term requiring consent to subsequent transfers of said asset or interests therein;

means for forming a disregarded entity holding rights to said asset; and

means for causing transfer of a common law estate in the equity interests in said disregarded entity to a subsequent purchaser, wherein said transfer of rights does not require any said consent.

15. The system of claim 14, wherein said at least first disregarded entity is at least one of a single-member limited liability company and a single beneficiary business trust.

16. The system of claim 14, further comprising means for forming a second disregarded entity, said second disregarded entity holding all the equity interests in said first disregarded entity, wherein said means include means for causing the holder of all equity interests in said second disregarded entity to be transferred to a subsequent purchaser, wherein said transfer of rights does not require any said consent.

17. A method for transferring an equivalent of a common law estate in an asset owned by a first entity, wherein a direct transfer of a common law estate in the asset would entail significant transaction costs, the method comprising:

forming a disregarded entity holding said first entity'"'"'s rights in said asset;

transferring a common law estate in the equity interests of such disregarded entity to a subsequent purchaser, wherein said subsequent purchaser acquires said equivalent of a common law estate in the asset, and wherein said transfer is performed at a substantially lower cost than would be required if a direct transfer of a common law estate in said asset were performed.

18. The method of claim 17, wherein said equivalent of a common law estate in said asset is the functional and tax equivalent of a common law estate in said asset.