Here's my thinking- we all get told to create LLCs to protect ourselves. But please raise your hand if you ever got sued and the LLC protected you? can you share what happened?
I'm asking because I own 3 properties in FL, under my LLC (which i never even got umbrella coverage for- just insurance for properties), and now I'm looking to pick up properties in other states- so I'm getting told to create LLCs in other states too.
So please tell me- How many of you actually got sued? and did the LLC protect you? is this just a best practice with no real data of law suits by tenants behind it? the costs of establishing, insuring and filing returns for all these LLC's is becoming a concern.
Been sued before. Won. But it didn't feel like it. LLC doesn't keep you from getting sued. From my understanding the LLC just contains liability to that entity. So if you "lost" they can't go after other assets or you personally.
My insurance company represented me. It was a long process because the attorneys know the game. They are just looking for a settlement from the insurance company. You should always have an umbrella. It's too cheap not to.
Ellie, I'm not in any way a legal representative. What I'm sharing is things that I've been learning as I have spoke to a few lawyers as I just started my own LLC. Kyle is right the LLC pertains to that specific entity. The LLC will most likely be in play to protect you against a tenant lawsuit for your rental, however, it won't necessarily help you if you get in a car accident and someone tries to sue you. If you're operating the LLC correctly, annual meetings, minutes, business accounts, correct accounting practices, etc. then it should be harder for someone to go after your personal assets. Also, what I've learned is that you should set-up an LLC in the state that the property is at, because each state has different regulations. I just finished watching this Video that was recommended to me. While I haven’t been sued, and hope I don’t have to deal with it, Brandon Turner has said something like, if you’re in real estate, it’s not if it’s when, when it comes to being sued. Again, I would seek some legal counsel for your specific situation. I’m still learning so take my comments with grain of salt.
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