Make sure your attorney (not CPA) explains this to you and to make sure you have a defensible position if the transfer is challenged by any of your creditors.

The policies also pay all defense costs over an above the liability limits until the point where the limits are exhausted.

I'm actually a financial anaylst for a defense contractor and I realized its time to make a change.

The beauty of the liability policy is that is will also pay all defense costs, which can get very costly, so best to put that expense on the insurance company.

Then take that cash and add that to the 1031 proceeds of the other one and use them together to buy a few properties - maybe one for cash and a couple with leverage and get yourself into a good defensive posture where you have a free and clear property with no market risk and leveraged properties you can blend returns on.The  sector I really like late in a market is student housing at residential state university towns. 

It really is all about proper research and creating as many defensible systems to mitigate as much risk as possible.

I do not want to be a jr. lender standing in front of a judge with a defense that says that I relied on the senior lender's loan app and qualifying procedures as my qualifying and documentation process.

I'm often accused of being defensive here.

If there is no deposit, this will be your defense in case the tenants come back and claim they paid a deposit.If there is a deposit, the seller should transfer the money to you at closing.

An umbrella adds a third line of defense.