Earlier this year I had a client tell be about a webinar that they suggested that I needed to watch about asset protection.
Months later, I had a client whose rental property was involved in causing a building fire.
I finally was able to schedule the time to sit through the webinar, and I did sit through most of a 8 hours on asset protection and taxes. I was already aware of much of the information, but they did have a couple of curve balls that are intriguing and in need of contemplation.
Back to the client fire, he owned a unit that was the source of a building fire for 35 units, all were condemned. The fire was accidental. I was one of his first calls, wondering if it were possible to now put his properties into LLC’s. I had been suggesting that he do this with all of his properties over the years. Alas, he chose to keep them all in his own name. Putting rental units into LLC’s was a main theme and recommendation from the webinar.
I informed the client that I was doubtful that this would work, since i believe that they could be clawed back out since they were organized subsequent to the incident. I informed him to call his insurance agent, and probably his attorney to see where he stood. He had reasonable insurance coverage for each property and an umbrella. The attorney believes that he can re-title the properties into another vehicle for asset protection and has since done so. His stance was since the lawsuits have yet to be started, the client could do as he wished. I am still thinking that since it occurred after the incident that there would be claw back capability. But I am not an attorney.
But there are multiple ways to protect your assets, starting with insurance and including LLC’s as ownership entities. There are shell companies that can be used to make finding true ownership difficult. There are states that provide immense protections from liabilities. There are ways to protect your assets.
Wrap up your exposure to limit liability. The webinar also pitched that further protection and privacy with other state organization or ownership of assets, before it flows back to you.