ARE YOU LIABLE?
As an estate planning attorney, it is common for me to engage in discussions with potential clients involving property ownership and how such property will be distributed to future generations or charities.
HOW IS YOUR PROPERTY OWNED?
While engaged in these conversations, it is always important to consider how such property is currently owned. Property owners are typically proud to notify me that the properties are owned in their personal names, until I uncover the potential liability that is coupled with such ownership.
PROPERTY OWNERSHIP IS RISKY
Let’s keep it simple. It is very risky to own property, other than your home, in your personal name. It is generally a better choice to own any rental and/or investment property in some form of formal business organization, such as an LLC or Corporation.
WHAT HAPPENS IF AN ACCIDENT OCCURS?
If an accident of some sort occurs on the rental property, for example, resulting in a significant injury or fatality, the injured person or his/her heirs will likely attempt to sue for damages. The owner of the property (you, if it is owned in your personal name), will be the likely defendant. As such, you, personally, could be liable for damages awarded. Conversely, when the property is truly rental or investment property, owning the property in a properly formed business structure such as an LLC can shield you from personal liability in the event of an accident and/or injury to someone on the property.
At The TGQ Law firm, we can help landlords take the proper steps to protect themselves. It is in your best interest to know that you’ve done what you need to do to avoid being liable.
If you have any questions about property that you own, feel free to contact us for further information. Give us a call at (734) 707-3232.