Title insurance issue when transferring to LLC

[Jay Bandi]

Hi all, 

I need some advice regarding transferring to LLC. We are closing our first rental property next week. The deed and title insurance will be under my name. My original plan was to transfer to a property owning LLC (by quit claim) which will be owned by an umbrella LLC (for anonymity and asset protection).

I am told by my lawyer that this will void title insurance as the insurance will only be covered if the property is under my name or a business entity which is 100% owned by me (eg property owning LLC). In my state only standard policy is provided and no endorsements are possible.

What is the best option? 

How important is title insurance after initial purchase?

Will it be still valid if there is a title issue in future and i transfer property back to my name?

Does it make sense to keep the ownership structure i had (umbrella LLC owning property owning LLC)

Does it make sense to buy new title insurance after quit claiming?

Any help will be appreciated.

Jay