A Land Trust Question

[Stanley Cleveland]

If for example I had 5 properties, each one sitting inside its own land trust. I have the beneficiary for all 5 of these properties as one Michigan LLC.

My question here is if for example I was facing suit for one property, would the other four be in danger or does Michigan law provide for some sort of separation protection?

[Chris Seveney]

@Stanley Cleveland

Many people are told they need to have all of these extravagant legal setups for entity structures, which for commercial properties it makes sense but for single family rentals it’s more often than not an overkill.

If you have an umbrella insurance policy, a good property manager in place and obey the laws anyone can sue anybody but what are they suing for? That’s why I ask, as most cannot come up with a reason. Try and find someone on BP who was sued on a single family and someone went after their other properties?

Also people will separate all their assets and self manage the properties, which is the easiest form of piercing any corporate protections because you as the manager will be sued which is the one thing tied to all your assets…