LLCs protect you from liability.
For most investors, the most valuable quality of the LLC is the liability protection it provides its owners. LLCs allow you to separate your personal assets from your business assets, which gives you protection from LLC debts and protects the LLC from your debts.
This separation means that if real estate owned by your LLC is at risk from litigation or creditors’ claims, your personal assets will not be at risk (with a few exceptions).
By taking careful steps toward distinguishing your personal property from LLC holdings, you can utilize the LLC to provide greater protection against personal liability.
LLCs can be tailored to fit your specific needs.
Finally, one of the most important benefits of the LLC is the opportunity to tailor the structure of your business.
This means that you can define how you will split profits and losses, how decisions will be made, and how your company will be owned when you retire or if you pass away. These are just a few ways you can enjoy the flexibility provided by an LLC, but there are many more.
Some people create multiple entities, with one LLC focused on the management of the real estate while the other LLC or subsidiary LLC owns the assets.
From determining your LLC’s tax structure to deciding whether to have annual meetings, we can help you design your company’s structure so it will function in a way that makes sense for the assets it owns.
LLCs have flexible tax options.
Another factor you should consider is the tax impact of creating an LLC.
Single-member and multimember LLCs that hold real estate can enjoy the benefit of pass-through taxation. In some cases, transferring your real estate into an LLC may not have a significant or immediate effect.
However, you may have significant tax issues to consider depending on how many owners your LLC has, whether you have a mortgage, and the value of the property.
LLCs protect your privacy.
Creating an LLC can provide greater opportunities to keep information about what you own private, especially when coupled with a living trust.
Property ownership in Texas is a matter of public record; some counties even have free searchable websites for tracking down property owners.
We will help you structure your business so that the public at large cannot learn about what you own. This can be a helpful asset protection strategy if you could ever be involved in litigation or if any of your properties are exposed to risk.
We Can Help
If you are interested in exploring the use of an LLC for your real estate, or if you’d like to hear more, we can help. We are ready to help you design your LLC and structure it in a way that provides the most protection for you and your assets. Schedule a virtual meeting with us today.
