Own a Rental Home? An LLC is a Must

This is a copy of my weekly email newsletter. As you can see I always try to give you information you can use right now to make your life better.

Hello! I hope you’re having a great week. I’m doing great, though still extremely sleep deprived by three week old son. It will be a great day when he starts sleeping through the night.

And speaking of sleep, if you own a rental home right now and it’s in your name, you should be losing sleep because you are exposed to a significant liability.

If you have the home rented, or even if you don’t, and something happens at your rental house, you may be personally liable for those damages.

That means they could go after your bank accounts, your home, everything.

Doesn’t seem like something that could happen in reality? 

Imagine there is a family renting your home. You believe all of the maintenance is up to date, but haven’t done a full inspection in some time. 

It doesn’t really matter though, because no one could have predicted that a guest of the renters would come over and “trip” on a crack in the entryway causing them to fall down the stairs and suffer a broken hip. 

Now they want you to pay for anything that isn’t covered by the insurance policy on the home.

Scary right? But the good news is that there is an easy fix.

To essentially eliminate this scenario all you have to do is put each of your properties into an LLC. This will shield you from personal liability.

It’s a relatively simple process that you can do on your own or a skilled attorney (like myself) can do quite easily.

The only requirement to make this happen is that you own the house free and clear.

“But Chris, no one owns rental houses free and clear,” you might be saying. And you might be right for a majority of the rental property owners out there.

The good news is there is a way around the bank holding the mortgage on your house. We’ll talk about how to do that next week.

Have a great weekend. Talk to you soon.

Cheers,

Christopher Small

P.S. Do you have kids? Have you completed guardianship paperwork? Have you done it correctly? Click here to find out what happens if you don’t do anything: Are you okay with a judge choosing the guardians of your children?

P.P.S. Do you own a business? Do you have a plan so the business, and your family, can survive if something happens to you? If not, click here to learn how simple it is to protect your business and your family from tragedy: 5 Ways to Protect Your Business from Catastrophic Failure.

P.P.P.S. Do you have no kids and think you don’t need an estate plan? Single and think a will is only for married couples. You couldn’t be more wrong. Click here to learn more: 5 reasons estate planning is a must have even if you don’t have kids.

Christopher Small is a Kirkland estate planning attorney who helps people get rich and live forever. He is also the owner of CMS Law Firm LLC.