2. i talk to an attorney and he says the LLC or trust may not be good because if you don't keep expenses for each one separately and COMPLETELY different books he can argue that your using it as the same person and he can pierce the LLC...What he recommended was just getting an umbrella policy.

Can I set up a DBA to pay this person and purchase good umbrella insurance, or do I need some type of  LLC/other corporation?

For example, I get a 6-month policy for car insurance, which I pay all at once, and 12-month policies for property and umbrella insurance, which I also pay all at once.

General liability, auto and workers comp are standard policies to carry as a licensed general contractor doing residential.As an investor, it’s not a bad idea to carry a personal umbrella policy to protect other personal assets.

You can have an umbrella insurance policy off your primary residence that covers your LLC from that standpoint.  

Someone could purchase an umbrella policy for insurance purposes.

I would make sure he or she sees the letters and your policy (including any umbrella).  

You dont even need to have them in an LLC, you just need a good umbrella insurance policy.

That's why we carry (IIRC) $100K/$300K on the cars and houses and a $2MM umbrella policy.You also want to maintain a good balance between your REI and other investments.

Hence you want to set things up cleanly, using liability protection (LLC, umbrella policy, documenting the transaction and being clear what you are stating to the seller).Bottom line:You can just avoid subject-to deals unless the seller pretty much begs you to solve their problem.