when you have a property in the name of a land trust and the beneficiary of the land trust is an llc how does the llc provide extra protection? Would the lawyer not be able to target the land trust directly ? The llc would provide protection if someoen targetted the llc . Is there a reason people cannot target the trust?
Flipper · Mission Viejo, CA · Member since 2014 · 2k+ posts · 1k+ votes
5y
@Hegsdery Gret the land trust is mostly used for "Privacy" reasons, but I also have the beneficiary as my LLC.
Privacy is the most important thing to me. If an attorney then find's out who the "Beneficiary" is then he will run into my LLC with all the protections that it has. I use one LLC per property that I own, so the "issue" will not spill over into my other properties. So all the attorney can go after are the assets of that one LLC.
P.S. I try to make it as hard as possible. My LLC's are in Wyoming, which is a very private state. If a California attorney want to sue me then they will have to go through the Wyoming laws. Which means they have to hire an attorney from there to go after very little that I may have in the LLC.
The best advise I can give you is treat everyone as you would like to be treated and avoid lawsuits...
Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
5y
@Hegsdery Gret, I am going to depart from what most of the folks selling asset protection say. First a Trust is absolutely useless for for protecting assets, and is extra expense. You must hire someone to be a trustee and do all of that work, if you do it odds are they will likely think you are really the owner and in charge. Next if you really wanted to sue you would file, then do interrogatories or a deposition and simply find out who is making the decisions. I use LLcs and corporations, but never dream of having a separate entity for each property, however if my properties worth one million each I might do that. Everytime you add another LLC or Trust, you add a lot of money and time. You are required to keep separate bank accounts, books, expenses, etc for every entity. I probably have about 2 dozen properties. I could not manage 2 dozen bank accounts, 2 dozen sets of books, 2 dozen sets of annual reports, 2 dozen sets of minutes every year, etc. Who do I put my business expenses on? Who pays the phone bill, utilities, stamps, etc. You can create a management company or parent company to own them all, but you will never really achieve anonymity unless you pay others to run your business. Who can afford that? As a beginner who negotiates the purchase, gets the loan, opens the bank account, signs the checks, shows the property, signs the leases, takes the complaints, hires the plumber, etc. Will you really pay an attorney to do all of that for you? I charge $200 per hour and live in WY so maybe you pay that or more likely $600 an hour to do all of these things. Where does your profit go? You best cash flow at least $1K a month per property if you want to pay an attorney to do these things. Do a simple LLC and run it properly, add a managing or parent company if you start doing well and it won't hurt your pocket book. Finally ask yourself this question, do any of the really big players on BP use this kind of structure of anonymity? Not a single one of them that I know of. Don't listen to the guys selling asset protection, listen to the guys who are making it happen in the trenches.