Good Intentions, Poor Execution

Yesterday, I spoke with a client named Jane. She purchased a multi-family rental in Florida with cash in 2022. The realtor told Jane, “I’ll go ahead and set up an LLC for you. You definitely want to LLC for asset protection purpose.”

True to his word, the realtor did, in fact, establish an LLC. Jane set up a checking account and started collecting rent through the LLC.

During our conversation, I asked her about her multi-family rental in Florida to ensure she was using her LLC properly. Jane explained that the title of the property was still in her name. Though the LLC was collecting rent and paying expenses, if an accident were to happen, since Jane’s name is on the title as the owner of the property, Jane’s LLC would provide absolutely no protection whatsoever!

There are several considerations as to whether the property should go directly into an LLC or if the property should be moved into a Real Estate Privacy Trust, sometimes referred to as a “Land Trust.”

Merely forming an LLC to collect rent and pay expenses when the property title is in your name is the wrong way to protect your assets.

Jane called the realtor to ask about this “miscommunication” with the property title. His response: “I set up the LLC for you, but you were supposed to call an attorney to transfer the title.”

Many investors are in Jane’s boat. If you, your spouse, or your partner have your personal name on the title, as innocent as you may be, you are going to be held personally liable. When establishing your LLC and/or trusts, consider scheduling an appointment with one of our experts at NCH. In the event of an accident, you’ll have peace of mind knowing everything is set up and operating properly.

With NCH, the state’s top business formation service, you can register your LLC in Nevada quickly and easily. Our specialists will help you choose the right entity for your company and understand why an LLC in Nevada is your best option. We’ll assist you with all necessary Nevada LLC forms, including the vital Articles of Organization, and help you comply with state regulations. In addition, we offer expert assistance with tax compliance, credit building, and payroll management. Schedule a private consultation to explore effective solutions to minimize tax liabilities and protect your wealth. Start unleashing your LLC’s full potential today with NCH. Schedule a consultation with Adam Kintigh today!

DISCLAIMER: The above material has been prepared for informational purposes only, containing opinions of the provider, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please consider consulting tax, legal, and accounting advisors before engaging in any transaction.