Is it worth placing your LLC inside of a trust?

Question

I am being advised by a CPA to form my series LLC and place it inside of a trust. He says that legally, this provides much more personal safety for me and my assets. Is there truth to this? Is it worth the extra money to get set up this way?

Grant Kemp · Answer

great info. Can someone direct me in the way of what insurance y'all are getting?

and yes Ann Bellamy, I am just starting out, and am taking your advice to heart.

Bill Gulley · Answer

In reality, it would be hard to really keep you idenity secret, it's pretty much hipe to sell programs. If you are negligent, grossly negligent, you better have insurance, if you unitentionaly mess up and violate law, it won't matter how many fronts you build, you will be personally responsible as a small RE investor.....

Rich Weese · Answer

Grant- I believe it is if you're in a certain financial arena and I do have some.... It probably should be your Estate Attorney advising you "legally" as you stated-not a CPA. Rich

Brian P. · Answer

Don't discount the value of multiple member LLC's. Want proof just ask the Brown family about trying to get a buck from O.J.Simpson's LLC. Browns zero, O.J. touch down.

Joe Bertolino · Answer

I agree with Bill.  You want to have the property entity for tax and ownership purposes but in terms of protection... insurance is your best bang for the buck.  For your annual $865 LLC fees you can buy a $4-5m umbrella.

Brandy Y. · Answer

Found this on a website , don't know if that helps.
But have a few qns - if you have a mortgage, deed of trust or mortgage that's filed against the property will remove any anonymity that one seeks.
Also don't know if mortgage companies would allow a land trust to hold the title.
More informed folks here would know.

Edit: duh found this link below, which might answer my own qn
http://www.biggerpockets.com/forums/51/topics/71021-land-trust-and-mortgage

Ann Bellamy · Answer

Grant Kemp since you posted in the "Starting out" forum, I'm assuming you're starting out.

John Hyre is a real estate investor, CPA and real estate attorney who speaks at REIA's.  I'm not promoting his products, but he once said:  "Don't worry about asset protection until you have assets to protect."

While I'm all about thinking ahead, it may be considerable overkill to form a series LLC and then place it in a trust.  Especially if you are just starting out.  The only one who's going to make money from that is the attorney.  With all due respect to the many excellent attorneys I work with daily.

Make sure you have the right insurance, and then go do your first deal.  First.

If you were simply in the wrong forum, then sorry.

Terence Stacey · Answer

It all depends on what you are trying to do? Protect your personal liability or protect your privacy? Liability is very real when doing any kind of business. Insurance is definitely needed but what if that is not enough?

Bill Gulley · Answer

An estate attorney should be addressing this, it depnds on the trust and depending on the registration of the LLC, the trust may be named as a member opening the trail to the trust, so the registration requirement may dictate the plan.

I have trusts and LLCs, but they are not formed because I'm as paranoid as most seem to be here. OTH, if someone doesn't pay miuch attention to their business, they operate in a care free manner, are often negligent in other aspects of life, then doing all you can do to hide out might be a good way to go.

This public liability razz is way over hiped IMO and insurance is your best solution.

Hey, not implying our OP is paranoid, I know he has good reason to be concerned from other posts, but don't take legal advice from a CPA and don't ask your attorney to set up your accounting systems.

BTW, a good estate attorney are the most expensive I have encontered, talk about sticker shock, but well worth it in the end, espcially in the end....I hope....LOL

Grant Kemp · Answer

That actually makes good sense, thanks.

Is it worth placing your LLC inside of a trust?

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