A Trust, An LLC and Insurance...

[Mike Neubauer]

Forgive me because I really don't understand legal matters, taxes and the like very well, but hopefully someone here can help shine a little light on this for me...

So here's the situation, I have my personal house, which I also built a 1bd/1bath rental onto. I also have a couple vacation rental properties. I took a cash out refi with the house to get the cash for the VRs which I own free and clear. I also setup an LLC to hold my investment properties and to use as I grow as a real estate investor. I do understand the vulnerabilities of an LLC and currently the VRs are in my name. I was planning on putting them into the LLC and putting the house into a trust.

I don't know if this is the best way to go, but I also need to get insurance to cover my butt. I haven't done this yet because I'm not sure if I can get an umbrella policy to cover all my assets especially if I have some in a trust and some in LLC, or if I should just put them all in the trust. And if I do this, then the LLC wouldn't hold any properties I assume and just basically be a management company, I think.

Again, I'm sorry that I don't understand the intricacies of how this all works, and I guess what I'm in search of is a bit of clarity and direction of how would you folks structure these assets and how would you go about insuring the assets?  Thank you so much for your insights!

[Jason Bott]

@Mike Neubauer if the properties have common ownership, you can have multiple entities on a single policy, as well as an Umbrella over the top. 

In your example, you could have your LLC's, Trusts, etc on a single commercial Property & General Liability policy. An Umbrella then goes over this commercial policy and would be able to go over your personal Home & Auto. This structure give you the ability to have a uniform Liability limit of $1M - $5M over all of your assets.