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Are LLC's as iron clad in protecting you as people suggest?
I hear you should put your properties under an LLC to protect yourself, your savings & your home from anything that may arise from a lawsuit associated with one of your properties, but I wonder if that is just something people stated repeating to others without knowing if it's factual. I've heard a good lawyer could find holes in that setup and wipe you clean.
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- Tax Strategist| National Tax Educator| Accepting New Clients
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Yep. Sure can.
My two cents from the tax side ....
A. It's important to keep business/personal completely separate to show you're not just treating it as an extension of your bank account. And I would say at least 75% of the books I've reviewed in my years in tax have some personal expenses recorded in there.
B. (I'm not an attorney so I can't confirm this part) but I listened to an attorney speak who mentioned charging orders. Basically if your assets are in an LLC and YOU personally get sued. A judge can force you to disperse your assets from the LLC to yourself to meet the court order.
Do I think you shouldn't have LLCs? No absolutely not.
Like anything else they're a tool and can help. Should you not wear a seat belt just because you can still get injured in a wreck wearing one? No. but it can definitely mitigate the extent of the injury.
