Q. #4. I own several rental properties. What can I do to protect myself from lawsuits by tenants or their visitors.
A. There is no easy answer with such little information. Depending upon their value and any indebtedness, you might consider establishing a properly-drafted separate Limited Liability Company ("LLC") for each property. The purpose of using multiple LLC's is to prevent one problem property from contaminating all of the properties should a major liability occur. Another issue is - are you married, and, do you live in a community-property state?
Contrary to the claims of many ill-informed promoters, the vast majority of the states do NOT limit a creditor's remedy solely to a "charging order" and, thus, the sought-for asset protection would actually be unavailable in those states. Please remember, however, that because real estate is not a movable asset certain creditors may still litigate a successful claim in the state where the real estate is located. Therefore, additional vehicles, such as asset protection trusts, may be necessary if you truly desire substantial asset protection.
For proper estate planning and asset protection, call us today for a free consultation to discuss what structures may be of benefit to you for your particular situation.