This is Part 3 of an interview with our speaker at Traction REIA this month who is both a Tax Attorney & Certified Public Accountant.
You’ve talked about a properly structured Revocable Living Trust (RLT) to protect assets from probate when you die.
What about dealing with general asset protection on my properties and businesses while I’m alive, in case something bad happens?
Let’s look at another disaster that would not even be protected with an RLT. It came from one of my students – Thomas Vareya from New York.
In this case, the real estate investor landlord was sued by the parents of their son, a student who was a tenant of one of the investor’s properties.
The student (tenant) locked himself out of the property by mistake and decided to scale to the top of the house to get in, but he fell and became permanently paralyzed.
Everyone was obviously shocked and grieving.
Then the family’s lawyer realized the investor’s LLC’s certificates were considered personal property, so the lawyer sued and won, wiping the investor out completely.
In other words, instead of trying to collapse the LLC entity itself (LLC front door) to attach to the personal assets, the lawyer went right through the LLC back door, attaching the investor’s totally exposed LLC membership certificates (shares).
This then collapsed the LLC entity to attached personal assets.
This is a form of “reverse veil piercing”, a dangerous and very effective weapon against unprotected assets.
The whole event is unfortunate, but was it the landlord property owner’s fault that the student climbed up onto the roof and fell?
If something similar happened with one of your properties and tenants, would you want to get wiped out financially?
Or would you want to be protected?
Want to learn more and be able to protect yourself properly?
Bill is doing 2 events for Traction REIA:
#1. IN-PERSON: Washington DC Main Monthly Meeting
TOPIC: “The Power Of The Right Structure: The Foundation For Keeping What You Make and Protecting Your Assets Without Expensive Lawyers”
SPEAKER: Bill Noll, CPA & Tax Attorney
Thursday September 16th IN-PERSON
Marriott Dulles Airport
6pm to 9pm
#2. IN-PERSON: Full Day Training Event with Bill Noll, CPA & Tax Attorney
“Total Wealth Protection for You and Your Family”
Saturday September 18th IN-PERSON
Marriott Dulles Airport
9am to 4pm
See you there!
12+ Year Recipient of the National REIA “Honors of Merit”
and the “Award of Excellence”
For Best Real Estate Investor Association!