I asked this important question to our speaker at Traction REIA Online this month who is both a Tax Attorney & Certified Public Accountant.
TOM ZEEB:
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?
BILL NOLL:
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?
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Want to learn more and be able to protect yourself properly?
Bill is doing multiple ONLINE events for Traction REIA this month:
#1.
ONLINE Training Webinar ::
The Power of the Right Structure – The Foundation For Keeping What You Make and Protecting Your Assets Without Expensive Lawyers
SPEAKER: Bill Noll
Tuesday January 23rd ONLINE using ZOOM.
8pm Eastern
7pm Central
6pm Mountain
5pm Pacific
Works nationwide. Join us from anywhere.
Click here to RSVP & Get the Zoom Link
#2.
Traction REIA DC Beer & Real Estate Happy Hour
Thursday January 25th from 7pm to 9pm
Caboose Tavern
520 Mill ST NE
Vienna, VA 22180
Click here to RSVP
#3.
Traction REIA Sarasota/Tampa Beer & Real Estate Happy Hour
Thursday January 25th from 7pm to 9pm
Mandeville Beer Garden
428 N Lemon Avenue
Sarasota FL 34236
Click here to RSVP
#4.
ONLINE Training Masterclass ::
“Total Wealth Protection For You and Your Family”
SPEAKER: Bill Noll
Saturday January 27th
ONLINE using ZOOM.
9am – 1pm Eastern
8am – 12noon Central
7am – 11am Mountain
6am – 10am Pacific
Works nationwide. Join us from anywhere.
Click here to Get a Ticket & the Zoom Link
Tom Zeeb
President
Traction REIA
Washington DC | Tampa | Sarasota | Online
Traction REIA:
14+ Year Recipient of the National REIA “Honors of Merit”
and the “Award of Excellence”
For Best Real Estate Investor Association!
