Asset Protection - LLC or no LLC?
Hi all!
I live in Florida, however, just closed on a duplex in Ohio. The duplex right now is under my personal name. I want to transfer it to an LLC but it will trigger the due-on-sale clause. I'm reading that we can setup a land trust that holds the property and have an LLC as the beneficiary to still reap the benefits of an LLC and to avoid the due-on-sale clause.
1) Are there any other ways you suggest to protect this property?
2) Also, if I were to open an LLC. Is that something I file paperwork for in Florida or in Ohio?
I recommend talking to people with some experience how often the due-on-sale clause has been actioned by banks on performing notes. Also, it depends on how you purchased the property. If you claimed it as your primary then most lenders advise that you wait one year before transferring them into an LLC since you are supposed to live in it for 6-12 months.
Chances are that you pierced the corporate veil when you initially purchased it under your personal name. It is hard to go in front of a judge and say you did not intend to use it for personal use when the title was initially transferred to you personally and not your LLC. Just do not get sued by someone with enough money to afford a good lawyer.
I am not sure about the LLC filing regarding out-of-state purchases as I only have properties in Columbus, Ohio and I live here.
