Asset protection planning should be accomplished well in advance of an actual risky event. Far too many people approach the subject of asset protection planning when their risk has already emerged in the form of a creditor or a lawsuit. A limited liability company may be one way to avoid the dangers of being unprotected. This can be set up to help hold particular assets. In many cases, LLCs are used as a way to orderly transfer assets to a future generation as well as to reduce estate taxes.
However, you also gain additional asset protection benefits associated with an LLC so long as you comply with the legal formalities required. Isolating the liability linked to a particularly risky asset is one common goal accomplished with a limited liability company. This works very well for assets like investment real estate. Having these properties owned in your individual name is a poor decision because a lawsuit associated with a property could jeopardize all of the personal assets you have worked so hard to build.
If a property is placed inside an LLC, then the injured party can only attempt to seize assets of the LLC, not your personal assets. Consulting with a California asset protection planning attorney is strongly recommended if you believe that you need to take the necessary steps to plan for your future.
