Today Big Picture Retirement Podcast had the topic of:
Protecting Rental Property
My question that arrises from this is.... "Is this overkill?" (They were suggesting series LLC and separate tax return for each LLC which would also mean a separate bank account for each LLC).
Has there ever been a RE liability case where the plaintiff exceed $1,000,000 from insurance and then pierced the LLC and sued the landlord personally?
I have my property insured for $1,000,000 liability... I have a property manager... and it is in a pass-through LLC. I realize I could do more but should I do more?
Thanks for any comments... advice...
@Carol D. - From a tax perspective, it sounds like overkill. Personally, I have a Series LLC, with each cell having it's own bank account, ein, books, etc. but we roll everything from the cell up to the main Series LLC and file one tax return. The idea of filing each on its own tax return would get prohibitively expensive and likely kill any benefit that couldn't be had from a substantial umbrella policy. To each their own on a legal perspective, but from a tax perspective, I'd happily do it for a Client if they in$i$ted on it $$$$, but I would have a hard time recommending it myself.
The LLC is helpful when the insurance doesn't cover, like negligence claims. Check out this article for more https://www.biggerpockets.com/blog/insurance-asset-protection