Changing to LLC After Paying Off Property

[Penny Clark]

Hi Everyone,

After scrimping and saving for four years, we've been able to pay off the mortgages on two properties we own. Our concern is that two homes free and clear could become a substantial financial target if we were to get sued. I've read about holding title in an LLC. How easy is this to do, what kind of protection does it afford and how do you go about it in California? Thanks all for your responses!

[Curt Davis]

@Penny Clark

Its very simple. You form an LLC and then you will do what is called a Quit Claim which transfers the homes from you to the LLC. The protection that an LLC offers has always been subject for discussion. I would suggest getting an additional umbrella insurance policy for your rentals bc that could provide as good or better coverage then what the LLC might be able to offer.

Good luck