Questions to ask when interviewing an asset protection attorney?

Question

Does anyone have advice on what questions to ask when interviewing asset protection attorneys? My goal is to build a buy and hold investment portfolio, and I'm interviewing attorneys to help me establish and maintain a legal entity structure. What questions should I ask that will help me evaluate which attorney I should select?

I thought for sure there would be a great list already on BP but I haven't been able to find one.

Jay Hinrichs · Answer

Annelyse Finley  from my point of view someone who has been in the trenches for 40 plus years.

you have two distinct things going on... one as J martin explained your going to use your Freddie fannie slots 4  or some times up to ten to buy rental homes with and a personal resi.

these will need to be in your personal name and proper insurance with an umbrella usually suffice's

LLC for me is not about asset protection as much as it is about setting up partnerships and uneven distributions of profit or loss.. plus loss carry back if needed for us self employed folks. And a certain amount of anonymity.. I can all but assure you if you do get into litigation you wil get sued personally no matter what entity you have set up. .and this is were insurance is important they will if its a covered event hire your attorney for you..   Single member LLC is just an alter ego for yourself and easily pierced.. if you have a true partners ship IE other members then its a much better protection device but then all partners get sued.

also a major component in my mind is what kind of real estate are you going to do?  if its just vanilla rentals then your best defense is to not be a slum lord.. in 40 years of owning rentals I have NEVER had a sniff of being sued by a tenant.. and that's over 400 separate rental properties that I have owned.  So for me because most of this activity was in partnerships it a LLC with 5 mil umbrella don't be a slum lord and there ya go.  But if you have a pool that's risk baby drowns etc etc. this is insurance that you need.

Most litigation in Real estate is centered on the deal  IE buyer or seller suing each other for some act. or Partnership disputes..

Remember asset protection attorneys are humans and have a business to run their business is to sell you asset protection .. so if you talk to one of course they will recommend you have asset protection can't hurt you...

But if your a nervous nelly I can see it.. you have millions of true cash equity then I can totally see that your trying to protect 50k of equity on some house you bought in Memphis for a rental Nope don't see that.

As a new home builder we have big potential liability and of course this all matters to us as construction defect is a huge issue.. But the ultimate for us is to make sure subs are insured general is insured and then we end up buying a 2 to 5 mil policy on top of all of that and this is to pay for lawyers.. I bought a 2 mil policy for the lastest PDX project and it cost me 50k .. its 10 year coverage. I spent 2k having a lawyer go through the policy and there are still lots of outs for the insurance company.. And if they deem your LLC was not properly capitalized then you get sued personally anyway.

So I am sure this does not help your thought process much.. but if you feel better you can wip up a LLC for 500 to 800 bucks and off you go.

Troy Fisher · Answer

You should ask some of the San Francisco, Oakland and San Jose Experts out there whom they use.  @J. Martin Account Closed are three great people in the area to get to know when starting down the Investing road in the Bay Area.

J. Martin · Answer

"You should ask some of the San Francisco, Oakland and San Jose Experts out there whom they use.  @J. Martin@Minh Le and @Johnson H. are three great people in the area to get to know when starting down the Investing road in the Bay Area."

Thanks for the shoutout @Troy Fisher . My name is in good company ;)

Annelyse Finley wants to chime in on this never-ending LLC question..? (or too many times already..?)

Definitely come out and meet all the local investors. I recommend going down to Johnson H's meetup in San Jose tomorrow (try to leave early! easier if you don't have a W2! ;) And hopefully see you at the Summit!

Jay Hinrichs · Answer

@Ryan Landis  EXACTLY  single member LLC is not asset protection in any form in my opinion.

Matthew Kreitzer · Answer

The key to finding a good attorney is to find one whose personality matches your own and that you can trust to handle your case. The secret to success is that experience is less important for Attorneys than is confidence. Any classically trained attorney can find the answer to a legal question given sufficient research.

As such, make sure you ask questions regarding their personal style;

1) Are you of an aggressive attorney when you are in Court or are you more of a deal maker?

2) What was the hardest case that you have handled, and how did you deal with opposing party?

3) What systems do you have in place for dealing with client questions or interacting with outside parties?

4) Who are your support staff and how are they with other people?

It is more about people and process than experience. Find an attorney you can trust and that matches your style. If you want a pitbull, get a pitbull. If you want a deal maker who is fantastic in social gathering, get that.

James Wachob · Answer

Annelyse Finley  when I was choosing my attorney - I 1st found a mentor, who was in the position I want to be in in the next 15 years. Then used his knowledge and experience to find my best match.

I guess I'm a copy-cat.

Jw

Ryan Landis · Answer

Annelyse Finley is spot on. In addition, CA has a relatively high cost to run an LLC each year ($800) and that doesn't include possibly a registered agent, etc.

What you will find is most people would run the LLC in a manner that actually does not separate you well enough and the structure would get pierced pretty quickly by a good attorney (I am not one but have spoken with quite a few about this subject).

Umbrella insurance is a great alternative because it actually will typically reduce your home/renter's policy, car, etc. because it can kick in there. Separately, if you are running a business, you can get an additional policy there.

As you make the calls to the attorneys, also call great insurance agents while you are at it.

Amit M. · Answer

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Annelyse Finley · Answer

@Matthew Kreitzer I'm looking to build a relationship with an attorney who could help me establish an entity(ies), defend them if need be, and--in a perfect world--act as an advisor as I grow my portfolio.

@Troy Fisher thanks for the bay area recommendations.  I just read J.Martin's "I quit" post yesterday--very inspiring!  I haven't had a chance to meet any of these folks yet.

@William Morrison good thoughts, thank you.

William Morrison · Answer

For each suggestion ask how, why and when will it fail?  Insurance, LLCs, S-Corp etc all have positives and negatives.  If he doesn't come with a combination and clear examples of weaknesses move on to next attorney.   All of them have strengths, where is your attorney making his money and has he/she separated it from his suggestions or solutions.What if you do maintenance or repairs?  What are the different type repairs and maintenance that have different risks?

Questions to ask when interviewing an asset protection attorney?

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