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ASSET PROTECTION FOR REAL ESTATE HOLDINGS
By: James L. Melchers |
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Do you own rental property? How is the title held to these properties? Do you own them
in you and your spouse's names? Do you rent these residential and /or commercial properties?
If you have residential and commercial properties which are rented reading this article
will provide you with information as to how to protect these assets in the event of a lawsuit
which you lose. For example if you have ten (10) rental properties which are held in your name
and you are sued relative to one (1) of the properties and you lose the case, all of your rental
properties can be reached by the judgment as well as your other personal assets.
Since the ownership of real estate is of public record, anyone can access this information
relative to properties held in your name, and you are more likely to be the object of a lawsuit.
The object of the ownership of real estate properties held out for commerce is for you to
maintain a low profile and not have your name blasted all over the public records. Therefore, it
is critical that you develop a better plan to protect your real estate holdings. An entity that works
extremely well for asset protection is the utilization of the Limited Liability Company (LLC).
Assuming that you own ten (10) rental properties, you could form an LLC and place all
of the properties into the LLC. However, if there was a lawsuit against one of the properties and
you lose, the judgment would be against all of the properties held by the LLC. The best plan
would be to create ten (10) different Limited Liability Companies and place only one (1)
property into each LLC. If there were to be a lawsuit against one of your LLC 's with one
property involved and you lost the case, only the property held by the LLC would be affected
by the judgment.
It is important that you not treat these entities as your personal checkbook or personal
asset. Asset protection techniques such as the utilization of LLCs' will become more attractive
in the future as liability insurance gets more expensive each year for less coverage. The LLC
enhances your protection, it is not intended to replace liability insurance coverage. You will
continue to maintain liability insurance to indemnify the LLC, its members and managers. In
conclusion, asset protection planning does not have to become some complex mystical
procedure, but it is essential to get something in place to protect those real estate holdings.
Contact us for more information at 504-467-1092 or 504-467-1130
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| Disclaimer: The information on
this website is for general informational purposes only. It is not intended
to, and does not, constitute legal advice. Use of this information does
not establish an attorney-client relationship with Melchers Law Firm, APC. |
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