Can a Trust Own a Business in Indiana?

Yes, a trust can own a business in Indiana—and doing so can offer powerful benefits for succession planning, liability protection, and long-term wealth preservation. At Mattox & Wilson, we help individuals and families structure trusts that not only protect their assets, but also support the growth and stability of their businesses across generations.

Whether you’re setting up a family LLC, operating a closely held corporation, or thinking about retirement, it’s worth asking: should your trust own your business? Let’s explore how that works under Indiana law.

If you’re ready to protect your business and plan for the future, we’re here to help. Call Mattox & Wilson at (812) 944-8005 to speak with a business trust attorney in New Albany and start building a strategy that works for your legacy.

What Is a Business Trust in Indiana?

A business trust is a legal entity where trustees hold and manage property or business interests for the benefit of trust beneficiaries. Indiana recognizes business trusts under Indiana Code § 23-5-1, which governs the creation and operation of these entities.

Under this statute, a business trust is permitted to conduct business and can register with the Indiana Secretary of State. Trustees are authorized to manage operations, hold title to property, and distribute profits to beneficiaries in accordance with the terms of the trust agreement.

Can My Revocable Living Trust Own a Business?

Yes. A revocable living trust can own business interests in Indiana, including:

  • Membership units in an LLC
  • Shares in a closely held corporation
  • Interests in a partnership

Transferring business interests to your trust allows you to maintain control of the business during your lifetime while avoiding probate when you pass away. This is particularly useful if you’re the sole or primary owner and want to ensure smooth succession without court involvement.

Why Would I Want My Trust to Own My Business?

Placing a business interest in a trust can help you:

  • Avoid Probate: Business interests held in trust may be transferred to your chosen beneficiaries without court proceedings.
  • Ensure Privacy: Trusts do not become public record like wills often do during probate.
  • Provide Succession Planning: You can name a successor trustee to step in and manage the business if you become incapacitated or pass away.
  • Protect Minor or Vulnerable Beneficiaries: Trusts allow you to set terms for when and how a beneficiary gains control of the business or receives income from it.

As business trust attorneys in New Albany, we guide clients through these decisions to help ensure their business remains in trusted hands.

What Type of Trust Should Own My Business?

The right type of trust depends on your goals:

  • Revocable Living Trust: Useful for probate avoidance and control during your lifetime. You can change it or revoke it at any time.
  • Irrevocable Trust: Offers stronger asset protection, but cannot be modified without beneficiary consent. Often used in high-net-worth estate planning.
  • Business Trust (under IC 23-5-1): Designed specifically to operate a business under a trust structure. This may be beneficial for investment partnerships, real estate ventures, or professional practices.

We can help you determine the most strategic option based on your circumstances.

How Do I Transfer My Business to a Trust?

Transferring a business to a trust requires:

  1. Reviewing your Operating Agreement or Corporate Bylaws to confirm whether a trust can hold ownership.
  2. Preparing a Trust Agreement that outlines the trust’s terms, trustee powers, and beneficiary rights.
  3. Executing a Transfer of Interest, such as assigning LLC membership units or stock certificates to the trust.
  4. Updating State Business Filings, such as with the Indiana Secretary of State, if ownership records must reflect the trust.

As business trust attorneys with decades of legal experience, we handle all these steps in-house to ensure compliance and minimize administrative hassle.

What Happens to My Business if I Die Without a Trust?

If you die without placing your business interests into a trust, those interests will likely pass through Indiana’s probate system under the state’s intestacy laws or your will. This can delay business operations, create uncertainty, and even lead to disputes among heirs.

As experienced New Albany business trust lawyers, we’ve seen what happens when no plan is in place—and we’re here to help you avoid those outcomes.

Can a Trust Be the Sole Member of an Indiana LLC?

Yes. Indiana law permits a trust to be the sole member of an LLC. This is a common structure in estate and business planning. It offers:

  • Continuity of ownership in the event of death or incapacity
  • Limited liability protections
  • Centralized management via the trustee

You can maintain operational control while planning ahead for a seamless transition.

How Is a Business Trust Taxed in Indiana?

A trust that owns a business can be taxed in a few different ways, depending on the trust structure:

  • Revocable trusts are typically taxed to the grantor (you).
  • Irrevocable trusts are separate tax entities and must file IRS Form 1041.
  • Business trusts may be taxed like partnerships or corporations depending on elections made with the IRS.

The tax treatment of a trust that owns a business can vary significantly based on the type of trust and the structure of the business itself. Because tax implications can be complex and highly individualized, we always recommend consulting with a qualified tax professional to evaluate your specific situation.

At Mattox & Wilson, we regularly collaborate with experienced tax advisors to help ensure that your trust and business structure are aligned with both your estate planning goals and any relevant tax considerations.

Call Our New Albany Business Trust Law Firm Today

At Mattox & Wilson, we help business owners protect what they’ve built—both during their lifetime and for the next generation. If you’re ready to explore whether a trust should own your Indiana business, we’re here to walk you through the process.

Call us today at (812) 944-8005 to schedule a consultation with an experienced business trust attorney who serves New Albany and the surrounding communities. Let’s build a plan that works for your business and your family.

 

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