The Highest Form of Asset Protection

[Thoward]

Ok, quick question here. I'm assuming everyone on the board (well most people) have heard of or already know the standard three levels of asset protection (Insurance,LLC's,Land Trust). What I'm wondering is: Are there more COMPREHENSIVE, MULTI-STRUCTURED, "INTENSE" forms of asset protection?
For example, stronger entities, different trust forms, different legal representation?

I'm not looking to complicate something simple, I just believe that options help to increase successfullness. Maybe substituting a Corp for a LLC may be stronger. Any info, comments,suggestions, or ramblings are welcome. THanks.

[TMCG]

i really don't understand the question.

are you talking about how alot of people on here have discussed using a land trust and having LLC as beneficiary?  blah blah blah...

[Thoward]

NO NO NO!!

 I don't want to get into all that as it seems to be a religion to some and heresy to others. I just mean do people layer their asset protection in different way's by possibly substituting one entity for a different one to make it stronger.

[NoMoneyDown]

I think it's an open-ended question unless you are talking about some specific issue.  Mike Wagner and others would probably be the best to talk about it, but it would seem to me that having more than 1-2 "layers" of entities would not only over-complicate things, but may lead to more problems than solutions.

[mcwagner]

nope.

and an LLC is stronger than a corporation.

corporate stock, even Thoward, Inc., is considered an investment.  As such it is available to satisfy judgement creditors.  so when you rearend the lady in the pinto, she sues and wins, she can be awarded your investments.  Now she owns the stock of the corporation that owns the property.

LLC membership, by contrast, is considered personal property by statute.  As such it is not available to satisfy judgement creditors.  Now the best the lady in the pinto can get is a charging order against LLC income, which you can frustrate.

Both the corporation and the LLC protect you from liabilities arising within the entity, but only the LLC protects the entity from your personal liabilities.

[Thoward]

Thanks mcwagner,

I think I explained the question a bit wrong at first though, but I can use your explanation to help this make more sense.

Lets say for example I own 6-10 properties that are currently in my personal name. I'm looking to build an extremely strong level of asset protection (or as strong as possible) and am looking at my options. I know the three levels discussed on this forum are: insurance, LLC's & Land trusts. The insurance is obviously a must, and the LLC as you showed in your previous post is the best option for liability protection. What about the privacy that the land trusts help to provide? Is there another entity that can be formed to increase the privacy and possibly perform any other services a land trust is incapable of?

I hope that makes a bit more sense.  

[mcwagner]

nope.  

llc OR or trust; having both would be redundant to have both.

[TARealty]

If a person only owns one or two properties, wouldn't obtaining personal liability insurance be sufficient protection for safeguarding investment properties against any judgements??

[mcwagner]

you tell me.  grannie got $10,000,000.00 for a spilled cup of coffee.  how's your million dollar umbrella going to stack up when little Johnny slips on that loose board you didn't repair and snaps his neck?

[TARealty]

Ok , got it now. So, if I transfer my investment property to my LLC, would you still recommend getting liabilty insurance? Also, from what I have read in other posts, I understand that it is best to transfer title of property by a warranty deed as opposed to a quit clam deed.  Correct?
Thanks

[mcwagner]

yes, and yes.

[aatikajerry]

I THOUGHT THE MORTGAGE COMPANY WILL FORECLOSE ON YOUR PROPERTY IF YOU TRANSFER THE PROPERTY FROM YOUR NAME TO AN LLC OR ANY ENTITY. IS THIS TRUE?

[mcwagner]

technically, yes.  but, unlikely.  at worst I think they would find you in default, and most mortgages allow you time (30 days?) to cure a default.  You transfer the property back and everything's fine.

however, I have never seen a case where a bank has called a performing mortgage due for this reason.

[Thoward]

If your transferring the property from your name to an LLC that YOU own wouldn't it just be easiest to contact the bank and let them know. I can't see how it would be a problem being that YOU have already personally guaranteed the loan, and YOU own the LLC. I would think that maybe a signed affidavit stating the bank has authorized you to make this transfer and it doesn't invoke the DOSC or something like that in writing would do the trick. This sound about right?

[mcwagner]

nope.  If they approved YOU for the loan and YOU are responsible, the are not going to allow YOU to NOT own the property.  

don't believe me?  show up with your affadavit and report back to us what they say.