If you have investment real estate, aside from insurance, moving it into a limited liability company (LLC) can be an effective way to protect your assets.
A properly operated LLC can limit inside liability- where the property is the source of the liability, such as a slip and fall. Generally an LLC limits inside liability to the value of what the LLC owns.
A properly operated LLC can also limit outside liability-where the debt is the LLC’s member and not the LLC itself. Generally, a creditor of an LLC’s member cannot access the assets inside the LLC to satisfy a judgment for the member’s personal debts. Instead, the creditor is limited to the member’s share of the distributions, commonly known as a charging order.
Combining an LLC with other asset protection tools, such as an irrevocable trust, can provide more protection. Schedule an appointment to learn more.
