All Forum Posts by: Richard C.

when u put your property into an llc, you have an added layer of protection should someone decide to sue you. if you do not take any profits from entity(llc) the person suing cannot collect. and if they do try, they have to pay taxes on property till they collect. most lawyers will not file against an llc as there is no money to be made. if they can prove you negligent as manager claim can only be made on propertys in that specific llc.

This string is hilarious.    @Jon Holdmangave the correct answer right off the bat, and he was followed up with absolutely correct advice from @Rob Beland  and @Richard C. that was based on sound experience.   All this nonsense about trusts, LLCs, and double back flips to protect a whopping 4 rental policies that are mortgaged. It's surprising that this thread has gone as long as it has.  I say this as both a plaintiff's lawyer and a landlord:  just buy the insurance and move on with your life.

I have written posts on this area many times and do not intend to do a full article again. Please look up old threads. To shorten things up, an LLC will not protect you from a criminal act. You hit someone in the nose you are personally liable even if you were doing business as an LLC. If property was owned by an LLC someone had to be making decisions for the LLC in order to conduct business. If those decisions resulted in criminal acts the person making the decision would be liable. That is true if he is a property manager or the LLC managing member. I could not discern that from the article.

@Cameron Skinner had it correct in that LLCs work well for certain things. They do protect your assets from debts of the LLC. If you owned the LLC property personally and someone sued for a negligent act, your personal assets could be sold to satisfy the judgement. There is a reason why every state has law establishing LLCs and why millions of people use them. It is not because they are worthless. It is because they work. To say otherwise is a disregard for reality. It is not common to pierce the veil, but it can be done in the right circumstances. Most attacks are shot down by summary judgement. You are always personally liable for any act you do personally. If an LLC hires a hit man to kill someone, there was still a person who solicited the act and conspired to murder another. That is different from an LLC going bankrupt because a faulty furnace killed 3 folks by carbon monoxide poisoning and had 3 million dollar judgement against it. The biggest cause of piercing the corporate veil is not observing corporate formalities. There was also a case in Colorado where they went to the assets of an LLC without piercing the veil using standard reasons. Piercing is very rare without good reasons behind it. To say anyone kid out of lawschool can pierce one is dead wrong. There is a reason that no person with substantial assets does business outside of a corporate entity. LLCs had advantages over corporations as they can get your stock ownership but not your LLC ownership due to its partnership nature.

@Richard C. every state is different but in FL in almost 20 years of the LLC statute only one LLC has ever been cracked, FTC vs. Olmsted and this guy just transferred all his personal assets to an LLC with no business purpose, and it still took the full legal force of the Federal government to crack it. As long as it's a bonafide business interest LLCs are almost impossible to crack, at least here in FL. As I stated earlier nothing is 100% with enough lawyers and money and time maybe my LLCs can be cracked into by an outside creditor, but our goal in asset protection is to put so many hurdles in the way it's just not cost effective to even try.