When you have been able to accumulate resources, you have to protect what you have earned. Without question, we live in a litigious society, and there are always those who are willing to sue. For this reason, asset protection is a top priority for some people.
Anyone can be the target of a lawsuit, so you should remain vigilant regardless of your occupation. At the same time, people who engage in certain endeavors are particularly vulnerable to lawsuits. Landlords would fit into this category.
Family Limited Partnerships
One asset protection structure that can be used if you are a landlord is the family limited partnership. The anatomy of a family limited partnership involves a general partner, and limited partners. If you establish and fund a family limited partnership, you would be the general partner. As the general partner, you would have total decision-making authority.
You add limited partners when you are creating the partnership. As the name would suggest, the limited partners must be family members. The limited partners cannot take any actions on behalf of the partnership, so you do not have to be concerned about a loss of control.
If you were to convey a piece of property into a family limited partnership, the property could not be touched if any partner was personally sued. Plus, if someone was injured on the property that was held by the family limited partnership, the personal property of the partners would be protected from legal judgments.
Many landlords own multiple different pieces of property. You could create a different family limited partnership to hold every property that you own. In this manner, if one partnership was sued, the other properties would be protected.
Family limited partnerships can provide a solution if you are looking for asset protection as a landlord. However, these legal structures can also be used for estate tax efficiency purposes.
Obtain More Detailed Information
We have provided a very basic explanation in this brief blog post. If you would like to obtain more detailed information about the value of family limited partnerships for asset protection purposes, download our in depth special report.
This report is free, so there are no risks involved. To get your copy of the report, visit this page: Free Report on Family Limited Partnerships.
Asset Protection Consultation
Landlords are inherently vulnerable to lawsuits, but there are other people who prioritize asset protection for various different reasons. A family limited partnership can be a viable option for some, but there are additional asset protection structures that can be utilized.
If you would like to explore all of your options with the benefit of legal counsel, feel free to contact us through this page to set up a consultation: Sacramento CA Asset Protection Attorneys.