Worst:
– No coverage, held in your name.
Bad:
- Relying on insurance offers only a basic level of protection. It’s not very effective, but it’s better than nothing. Insurance policies often have exclusions and may not cover every situation. However, they can help pay some of the costs if a lawsuit occurs.
Good:
- Using one LLC for all your rental properties offers more protection than relying only on insurance. It shields your personal assets from liability. However, if someone sues you and wins, they could claim all your rental properties under that single LLC.
Better:
- Using one LLC for all your rental properties is safer than relying only on insurance. It helps protect your personal assets from liability. However, if someone sues you and wins, they could claim all your rental properties under that single LLC.
Best:
- Using a combination of LLC and land trust to protect your rental properties. These are more complex legal structures that can provide even more protection than a traditional LLC alone.
Here are some of the key things to keep in mind when choosing an asset protection strategy for your rental properties:
- Your risk tolerance: If you are not very worried about being sued, you may not need the best level of protection. However, if you are worried about being sued, you should use the best level of protection that you can afford.
- Your state laws: The laws governing asset protection vary from state to state. You should consult with an attorney in your state to make sure that you are using the best asset protection strategy for your situation.
- Your budget: The cost of asset protection can vary depending on the type of protection that you choose. You should make sure that you can afford the cost of the protection that you choose.
