Posted on: 25th Nov, 2007 09:37 am
What is the advantage for two private people with duel ownership to quick clam their house to an LLC? Is it to protect their credit score or what other purpose would such a move be for?
Hello Lelu,
LLC means Limited Liability Company. This is a legal form of a business company and offers limited liability to its owners. It is like a corporation and it is a very flexible form of ownership. But not sure about the advantages if you quitclaim a house to LLC. You may contact with a real estate agent.
LLC means Limited Liability Company. This is a legal form of a business company and offers limited liability to its owners. It is like a corporation and it is a very flexible form of ownership. But not sure about the advantages if you quitclaim a house to LLC. You may contact with a real estate agent.
Hello Lelu,
In order to get the maximum protection offered by the LLC, you may transfer your property to this so that the LLC becomes the owner of your property. If the title of the property is transferred to the LLC and there is a lawsuit or claim relating to the property, then you personally, as well as your other assets are released from the risk.
As far as I know, if you quit claim your property to a LLC, you should fall within the exemption for IRS non-recognition transaction, specially if you are the only member of the LLC. But I'm not sure about this.
In order to get the maximum protection offered by the LLC, you may transfer your property to this so that the LLC becomes the owner of your property. If the title of the property is transferred to the LLC and there is a lawsuit or claim relating to the property, then you personally, as well as your other assets are released from the risk.
As far as I know, if you quit claim your property to a LLC, you should fall within the exemption for IRS non-recognition transaction, specially if you are the only member of the LLC. But I'm not sure about this.
If there is currently a mortgage on the property and the lender finds out about the transfer they could call the note due in full. Meaning the loan would have to be paid off immediately.
If there is no mortgage... then yes an LLC is a great way to protect your assets from personal problems.
If there is no mortgage... then yes an LLC is a great way to protect your assets from personal problems.
Hi Livinginnky,
How does LLC protect your assets? Can you explain that in details.
I own a house that has two of my brothers as well as my wife as co-owners. Whereas, the LLC is owned by me only. If I transfer the property to the LLC, how will that help me? Will there be any complication in doing so?
How does LLC protect your assets? Can you explain that in details.
I own a house that has two of my brothers as well as my wife as co-owners. Whereas, the LLC is owned by me only. If I transfer the property to the LLC, how will that help me? Will there be any complication in doing so?
I am not a lawyer so obviously... I cannot give legal advice.
But the way I understand it is this...
Ok say you own 2 different companies all formed as "sole proprietors" and you also have a house, car, etc. Now say that your companies are sued and you lose... if your company assets don't cover what you owe then they will start selling your personal items...ie. Home, cars, etc.
Now, if both companies are owned by an LLC instead of you personally, then the entity suing your LLC cannot come after your personal assets.
Same thing goes for the LLC. If your LLC is sued then the entity bringing the lawsuit probably could not sue you personally.
There are advantages and disadvantages to every situation. This one is no different. Now obviously if you are breaking any laws you are still going to be responsible. And it is definately not a free ticket to just do whatever you want.
Hope that helped.
And to answer your last question... talk to an attorney. There is nothing stopping you from forming an LLC that is owned by all 4 of you. That way you retain the original ownership rights, but also protect your personal assets.
But the way I understand it is this...
Ok say you own 2 different companies all formed as "sole proprietors" and you also have a house, car, etc. Now say that your companies are sued and you lose... if your company assets don't cover what you owe then they will start selling your personal items...ie. Home, cars, etc.
Now, if both companies are owned by an LLC instead of you personally, then the entity suing your LLC cannot come after your personal assets.
Same thing goes for the LLC. If your LLC is sued then the entity bringing the lawsuit probably could not sue you personally.
There are advantages and disadvantages to every situation. This one is no different. Now obviously if you are breaking any laws you are still going to be responsible. And it is definately not a free ticket to just do whatever you want.
Hope that helped.
And to answer your last question... talk to an attorney. There is nothing stopping you from forming an LLC that is owned by all 4 of you. That way you retain the original ownership rights, but also protect your personal assets.