Holding Company?

[Jeff S.]

Can you sell properties from one LLC you own to another you own? Example: deed high equity property into an LLC holding company, then sell on land sales contract from holding co. to an investment LLC you own, with a small down reducing exposure from activities of the investment company. Holding Co retains deed and equity but does little in way of risky business.

[Don Konipol]

Property ownership in a properly maintained and properly set up entity does make a huge difference where liability is concerned. While it's true that anyone can sue anybody and everybody for anything, many lawsuits are settled on terms favorable to the defendant merely because of the entity holding title.

The headlines are made when a huge judgement is entered or when a judge or jury elect to throw out corporate law and
"punish" a particular individual by piercing the entity veil. However, in the vast majority of cases judges won't allow liability to be moved to another entity unless fraud is involved. This involves fraudulent conveyances, an area of law where specialized attorneys can render reasonable opinions.

Having property ownership in the "correct" entity to limit both inside and outside liability is a crucial first step in protecting assets. As assets build (and you become a more attractive lawsuit candidate) additional steps should be taken to "isolate" potential problem assets. Asset protection experts often talk about "layers" of protection. Proper entity is the foundation.