My two sons bought a house together (I'm their $ilent partner). We want to Quit Claim the house to our family LLC. The LLC has my two sons and I as equal members.
Moving the house to the LLC, protects all of us personally - from a tenant suing us. They can sue the LLC but the LLC protects us from personally being sued. CORRECT??

Secondly - how do we get away with not having to pay Real Estate Excise Tax?

A LLC would tend to protect the members from personal liability. However it might be still possible to sue the members on the theory that they personally may have something negligent which resulted in the injury.

Do you not have liability insurance? That in in of itself seems to be irresponsible on your part.

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Originally Posted by AK lawyer

A LLC would tend to protect the members from personal liability. However it might be still possible to sue the members on the theory that they personally may have something negligent which resulted in the injury.

Do you not have liability insurance? That in in of itself seems to be irresponsible on your part.

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We have homeowners insurance on both houses but haven't actually set up the LLC yet. Are you suggesting the LLC itself would need insurance as well? Wouldn't the homeowners insurance provide enough protection?

Any response on the Excise Tax question?

Thanks

If you have sufficient liablilty insurance, what do you figure your liability exposure problem is? In other words, do you really need to transfer the property to a LLC?

I'm saying that once title is transferred to the LLC, the company should be named as the insured. You and your sons might not have insurable interests any more. Talk to your insurance agent or broker about this.

As far as the excise tax is concerned, without telling us what state or country this is, how do you expect suggestions on how to avoid it?

Moving the property to an LLC is an excellent idea if any of the owners have other property that they wish to keep protected from possible lawsuits. The only liability the individuals will have will be for their intentional acts.

If you transfer the property then you will have to completely re-do your insurance. Only the LLC will be insured, not the individuals. Speak to your insurance agent about what is available.

There are going to be taxes involved. We have no way of knowing which taxes unless you tell us your general location. However in this case I suggest you speak to an accountant rather than relying on responses you receive online.