you for a mold claim. The claim is outrageous, but you fight it and lose. Now you have a $3 million dollar judgment against you (a real case we handled in our office). Insurance is not covering the judgment and you are now personally on the hook for the money. You own the property in your own name. Now your entire net worth is exposed to that $3 million dollar judgment. You could lose everything you have worked so hard to build. That liability can break out of the property to infect everything else you own, even the house you live in! If you own the property
in an LLC, then the liability is contained to the property and CANNOT break out to impact all your other assets. This is the force field I mentioned. An LLC also guards you from an outside liability. Your property is an attractive asset for any creditor to attack. If you have a liability away from the property and a creditor is looking to get money from you, your property is an asset they can go after. Unfortunately, people all across the country lose property from outside liabilities all the time. LLCs can be that protective wrapper around your property that prevents a creditor
from simply reaching in and taking the property. There is a layer of protection. A bit of a side note here on owning property with someone else. Did you realize you are exposed to your business partner’s liability? It’s true. Imagine if your business partner has a liability away from the property that you own together. Doesn’t matter where the liability comes from, they have it. Now your partner has a creditor coming after them and that creditor is looking at all of their assets. One of the assets they own is a property with you. Now, you are dealing with that creditor as they try
to grab the property. This is a horrible scenario. If you own property with another person, you want to wall off any exposure to their potential liability. You don’t want to have anything to do with your business partner’s liability. An LLC can serve to separate you from your business utilize an LLC to guard your property, then you need to make sure it’s done right. If you have a lousy LLC that was not set up properly or maintained in good standing and no liability ever comes your way, partner’s liability. If you are going to
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