I am not a lawyer but here is what I learned through asking the same types of questions. I am married with 2 younger kids, and have some assets, 2 large 401(k)s, savings, a few houses, etc. When looking at the bigger picture a living trust protects all your assets in the event me or my wife or both die, or become incapacitated because the assets are in the trust's name and the trust executor then ensures the assets are managed/passed as we wish. However they do not protect the assets if sued. That's where the LLC and Insurance comes in. If assets are held in an LLC and the LLC is sued then they can typically just go after those assets. Lastly the umbrella policy offers liability protection for you personally to protect you and your assets. In case I am in a car accident and I accidentally kill somebody the umbrella policy offers coverage. I have all three, Irrevocable Living Trust, an LLC, and an umbrella policy, they protect me in different ways. The LLC protects my from lawsuits as a landlord, the umbrella policy insures me personally, and if anything happens my wife or kids will automatically get my assets (living trust). It's not cheap but certainly worth it, when compared to how much I spend on other things as a Dad, Husband and Real Estate Investor. One doesn't replace the other.