It seems so natural when buying real estate that you'd put the property under your own name – after all, you are the owner. But what a lot of us don't think about are the ramifications of having our personal information out there and the liability individual ownership creates for all our other assets. There are many reasons why putting your real estate into an LLC is a great idea to protect you and your finances. Car accidents, business deals gone wrong, and injuries on your property are just a few of the instances where insurance might not be enough protection.
For the purposes of this article, we are going to focus on Nevada LLCs. Nevada is one of the best choices to start an LLC due to its protections. If you have real estate outside of Nevada, it is still a great choice. However, the costs and some rules and protections will differ and consultation with an attorney is highly recommended before starting your LLC.
Nevada is a business-friendly state and the advantages of forming a corporation or an LLC in Nevada are substantial. Your liability in an LLC is limited to the extent of the assets and debts contained inside of that LLC. This means your personal possessions, like your bank accounts and your home (if it's not the property in question), are kept out of the reach of any judgments. This is why having an LLC for your real estate is essential to protecting the rest of your financial portfolio.
Have multiple properties? You won't want to lump them together so they're all susceptible to being involved in a lawsuit, but the filing fees and other costs of having an LLC for each property can impede your cash flow. A Nevada Series LLC has the benefit of consolidating multiple Nevada real properties into one LLC divided by chambers. Having this entity reduces overall costs while providing the ease of consolidated management. Nevada corporations will provide many asset protection features and may be more appropriate for various tax and professional licensing reasons, but are not quite as flexible as the LLC for certain tax purposes.
Your individual situation will determine what path you take in protecting your real estate. Sundvick Legacy Center can assist you in choosing which Nevada business entity (or entities) and design will achieve your asset protection goals. We can also help with coordinating your real estate with your trust and estate plan. It's important to take the right steps now to ensure your assets are protected and your legacy is preserved for future generations.