Need help with Asset protection

[Vic Hartounian]

Need advise on how to set up best and practical asset protection.

I Live in CA. Have multiple single family Properties in various states.

Ca lawyer says single member LLC are not really a protection in CA.

Need to form multi member LLC.

Which means separate tax return for each LLC.

Obviously that’s too expensive when I have 7 llc’s.

Corporate direct says that nonsense. multiple single member LLC with a parent LLC in Wyoming is the way to go.

The ca attorney says irrevocable trust is the way to go.

But it’s expensive, attaining loans will be difficult and tax returns will be complex.

Anyone else in the same situation? How did you mitigate around ?

Thanks

[Jennifer Gligoric]

@Vic Hartounian - none of those structures would I recommend. You can have both asset protection and separation but you will have to have either one California LLC or one foreign entity registration in California depending on where your investments are located. A multi-single member LLC in Wyoming seems a very odd choice unless you mean a Series, but that will still get each Child Series (as with all Series) subject to the $800 minimum a year Franchise Tax.

The only irrevocable trust would be one for your Primary & secondary residence - but then it is expensive to break that, you have to figure out your life expectancy to anticipate the trust ending before the end of your life to get any tax advantages and the QPRT no longer has the incredible tax advantages it used to (though it might in 2026 when/if it reverts back to the old structure) since the sweeping changes of the Tax Cuts and Jobs Act (TCJA) in 2017.  That led many financial planners to reconsider the QPRT for California residents looking to both preserve their equity and avoid crippling estate taxes.

There are ways to mitigate around paying multiple California Franchise taxes & still have both flexibility and protection - but nothing will save you from getting around the California FTB "doing business in" California definitions which are incredibly broad and vague so that paying the minimum $800 per year per LLC is inevitable. The right structure will allow you to keep this to one entity while holding properties in another.

*I am not an attorney and I am not YOUR attorney so this is not legal advice. I simply happen to know the most awesome ones. *