Structuring your entities for anonymity is NOT asset protection

[Stuart Udis]

I am tired of reading about real estate investors seeking advice on where they should incorporate or how they should structure their entities for anonymity. Anonymity is NOT asset protection. To lay it out as simply as possible: if there is a viable claim, a plaintiff's attorney will pursue it regardless of whether you are incorporated in Wyoming, you believe you are hiding behind a management LLC or whatever other anonymity maneuver you believe is shielding you from liability.

All a plaintiff's attorney needs is the deed holder name to file a claim and this is public record everywhere. Once their claims are filed they can obtain your identity through discovery but in most cases they don't care who you are! This because they are most interested in your insurance. It's the path of least resistance and how they and their clients are compensated. In fact, I would make the argument when a plaintiff's attorney sees the $100K home in Detroit owned by a Wyoming LLC that attorney will be even more interested in you....exactly the response you were hoping to avoid. From a plaintiff attorney's perspective that is peculiar behavior and may actually believe you are hiding something. Congrats you just made discovery a more drawn out process than necessary and your insurance carrier's legal bills have gone up which I can assure you will impact your next year's premium.

I'm hoping investors allocate some of the resources and energy spent hiding in the cloaks of secrecy on being a good real estate operator who avoids claims from arising in the first place as opposed to falsely believing you have greater protection.  I can assure you, your business will perform far better as well.