All Forum Posts by: Jason Hsieh

@Jason Marino. I recently spoke with an attorney regarding the structure that RLS talks about and the and he thinks the liability and anonymity order is reversed. See his response: 

"I've seen this but struggle to understand the point. What does the trust get you exactly? And you'll need a trustee . . . and that person will be totally exposed to lawsuits since trustees are sued in their individual capacities (and trusts have no liability barrier). Total personal exposure. So who will do that for you? I certainly won't. What this structure attempts to do is achieve anonymity + a liability barrier. But the moving parts are in the wrong place. My use of an LLC with the trust as sole manager and member is superior to this in every way I can think of. The liability barrier is right in front where it's supposed to be. Anonymity (using the trust) is built in from the inside."

Any thoughts on this ?

@Aaron Porter: thanks for the suggestion. Some update from Royal Legal Solutions:

Their advisor recommended a DST with children series and the DST is owned by an anonymous trust. Each child series holds a land trust for each property (TX + FL). The advisor said the reason they did not recommend a series LLC is to avoid the CA franchise tax $800/year, which makes sense. There will be a shell operating LLC company that becomes the face of the public - makes sense as well. What I'm still trying to understand is the fundamental difference between a DST with child series vs. an actual series LLC. The advisor had said the DST operating rules & agreement will basically treat the children series like a series LLC - this is something I have not been able to confirm. Otherwise, their logic seems to flow pretty well.

It's October now, @Andrew Angell have you received any distributions? 

@Greg K. can you share where / which entity structure you ended up with? 

Background: I'm a CA resident who owns rentals in TX. I've been researching / talking to people about the best way to structure an entity for asset protection. I am seeing 2 structures that seem popular:

1. Two company LLC structure. See reference HERE. 

The two company refers to two LLC companies. One LLC is a series holding LLC that appears on the titles of the homes and owns the properties. The other LLC is an operation/management LLC that deals with the public at large (tenant, contractors, etc.). The holding LLC never communicates with the public and the management LLC holds minimal asset (rent collected). In the event of a lawsuit, the plaintiff sues the management LLC but cannot touch the holding LLC since they never deal with the holding LLC. It is not clear where these LLCs should be formed. This method seems pretty robust but I read about how the series LLC is not well tested in court.

2. The WY LLC + TX LLC structure. This is spoken at length by the rich dad advisor and Clint Coons, reference HERE and HERE. 

Basically the WY LLC that offers anonymity and charging order protection owns the TX LLC (or a TX series LLC). When a plaintiff sues the TX LLC, the TX secretary will see the WY LLC owns the TX LLC. And then because WY LLC offers anonymity, you are shielded from the plaintiff. What's not clear to me is whether the other TX properties are also protected from the lawsuit. I suppose if we follow the same logic the plaintiff will find the WY LLC without the actual owner's name again. Does this infinite loop effectively discourages the plaintiff to stop suing?

If anyone who looked into LLC structuring knows the different or have first hand experience I'd really appreciate you sharing your insights!

Happy investing!

- JH