LLC or Umbrella Policy?

[Steve S.]

As a long term, buy and hold investor, should I hold title to the property in an LLC to increase asset protection or is having an umbrella insurance policy enough? or both?

[Derek Dombeck]

Steve S 

I have spent years learning the hard way about asset protection. Everyone is going to and should have a different opinion on protecting their own assets. But don't take this lightly. If you want to own rental property in your own name, if and when you run into a litigation situation, ALL of your personal assets could be lost. 

When a company owns the rental property, the company may lose it's assets, but your personal assets should be safe if you structured the company properly.

As for insurance, it is always extremely important to have proper insurance. But, insurance may not protect  you if:

1. If there is proof of your negligence

2. A civil suit is brought against you

3. Divorce

4. Your untimely death ( personally held assets may end up in probate )

5. And countless other reasons

My point is, why work your *** off to build a portfolio of property and take the chance of losing it all because you didn't educate yourself on ALL of your options. Whatever you decide, it will only affect you. The rest of us giving our input have NOTHING to lose.

Choose wisely.

Happy Investing

Derek Dombeck