Setting up Indiana Series LLC?

Question

Hello Indiana BPer's: Anyone out there setup an Indiana Series LLC? Anything to look out for in terms of Insurance or setting it up?

Richard Anderson · Answer

@Jim Carson, and everyone else on this thread, there is a really good podcast (109) with Scott Smith which covers asset protection. They discuss Series LLC, Delaware Statutory Trusts, and trusts in general. Scott Smith is an asset protection attorney.

https://www.biggerpockets.com/renewsblog/2015/02/12/bp-podcast-109/

Jim C. · Answer

@Shawn Holsapple- Thanks for your feedback. I too, met with a corporate attorney in Indy near Allisonville Rd and 465 and they recommended what you mentioned. The issue that I brought up with them is that land trusts, especially if the property is already in my name or company name and I transfer to a Land Trust really doesn't 'hide' the assets as they claimed, since they were originally in my (or my company's name), any litigious attorney can easily find out that I once owned the property and then go forward with suing the land trust as well. Land trusts are only good if you buy directly and place the asset into a land trust for ultimate anonymity.  In addition, converting to a C corp causes double taxation and becomes very expensive if you have alot of properties. I'd be more than happy to share with you what I learned from that attorney with you if you are interested. I'm in Indy quite a bit and we can meet up sometime to discuss further if you're interested.

Shawn Holsapple · Answer

@Jim Carson, I'm in the process of rearranging my corporate structure as well.

My local Indy corporate attorney advised against using the series LLC option since it's brand new to our State and there is no precedent yet with them to see if they stand up in court as expected.

For me, this is the way I'm leaning:

Convert my S Corp to a C Corp as the holding or management company, then use LLC or Land Trust for each property or set of properties that is then all held by my Living Trust.

As far as the comment above about having your CPA setup your LLC structure - I've always been a firm believer of paying the right professional for the job...I'll gladly pay more now to the attorney to setup my LLC vs. saving a few bucks to have my CPA [bean counter] do it [unless the CPA is also a real estate attorney] - just my two cents...

Shawn Holsapple · Answer

Yes & Yes.

You should check out: "Start Your Own Corporation" by Garrett Sutton [Rich Dad Adviser].

Plus, here's some more great books to help you get doing down the right path:

Flip2freedom episode 77http://www.flip2freedom.com/a-3-step-formula-to-a-successful-balanced-and-insanely-profitable-2012/ - LISTEN TO THIS TODAY!

Rich Dad Poor Dad

Rich Dads Cash Flow Quadrant

Rich Dads Increase your financial IQ

The Real Book of Real Estate

The ABC’s of RE Investing

The ABC’s of PM

Rich Dad RE Tax Advantages

The 10X Rule

The E-Myth

The 4 Hour Work Week

Shawn Holsapple · Answer

I had a LLC before I bought my first property and am a firm believer of asset protection via this type of entity.  I would suggest finding a local attorney that is VERY fluent in real estate law along with corporate structuring.  Preferably a landlord as well.

Yes, one can setup an LLC online for under $100 but there a few check boxes that are critical to be selected correctly and I always recommend paying the professionals to handle sensitive items like this.

I would also suggest you have the attorney listed as the registered agent of your entity so your name doesn't show up on any public records.  Most will do this for free if you use them to setup the LLC to begin with.

You also need a Rock Star CPA [not a family friend that's been doing basic W-2 taxes for 40 years!] but one that knows this stuff inside and out.  You don't have to stay local for this, mine is out of State and it works fine.

Of course, this is just my humble opinion and I'm not an attorney or CPA - be sure to do your own due diligence in these matters.

Jim C. · Answer

@Alexandro McQuillan- I have several rental properties, so the Series LLC sounds like a good fit for me for what I've read. If you only have 1 property, then a standard LLC would probably work for you and is much cheaper to setup in Indiana than a Series LLC. Also, get good liability and umbrella insurance if the property you bought is being rented out to college students.

Shawn Holsapple · Answer

Several "experts" say even though the asset was purchased in your name before switching to the land trust, it can still stop or slow them down from finding out who the current beneficiary is - especially if your trustee has a PO Box [preferably out of State].

Yes, the C corp can be double taxed...but - the first $50k is not.  That's what I plan on doing is running the first $50k or so of profit through it and then the rest through my S Corp.  The C Corp allows be rent my house 14 times per year to my company, write off medical expenses not covered by insurance, travel, entertainment, etc.

Feel free to PM the next time you're in Indy, I'd be glad to dig into this deeper.

Kerry Noble Jr · Answer

I definitely learned a lot from this post and will reference it in the future.

@Aaron Laster couple jewels

Kathryn Dunnivant · Answer

Not all states have series LLC available.

Marie Cascade · Answer

Anyone have any idea how to attach an entity to a series LLC in Indiana? Nothing on the Secretary of State website, nothing in any advice columns. How would you get legal protection unless there is someway to formally attach assets to the series LLC?

Setting up Indiana Series LLC?

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