Asset Protection - Marital Separation of Assets

[Jennifer Bott]

My husband and I have 4 rental properties, and we're strategizing on the best way to protect our personal assets. I'm not sold on setting up an LLC, for several reasons. Putting all 4 properties into an LLC would mean that any lawsuits arising would put all those properties at risk. Setting up and maintaining separate LLCs for each property gets costly (in MA it's $500 start-up fee and $500 per year filing fee for each LLC). And while setting it up is fairly easy, maintaining complete separation of money (separate bank accounts, credit cards, money draws and deposits) can be rather difficult - any mistakes could disregard LLC status in events of litigation. Also, it seems it's getting easier to "pierce the veil" of protection, as seen in court cases around the nation as of late.

Umbrella insurance is great, but in cases of an enormous claim, would not protect our personal assets.

So my question is, what about spousal separation of assets? If my husband is the sole owner of the rental properties, and we legally remove his name from our joint ownership of our personal residence, so that I become sole owner, wouldn't that protect (my) personal residence from lawsuits against my husband and his properties? We do file a joint return, however I don't see that as any right to co-mingle our assets in event of claims. Any advice would be appreciated.