Posted by Brad Crouch on January 22, 1999 at 19:06:46:
> What is to keep people from coming after this
> ownership position, taking control of the cash flow,
An LLC has a “managing” member who is not “required” to distribute the income of an LLC at any particular time. So the income is not distributed while lawsuits are pending. The most the creditor can get is a “charging order” (kinda like a lien). As long as this “charging order” is in effect, the creditor gets to pay taxes on the income earned, even if it is not distributed. So what creditor would want to do that?
> I was thinking of this last month when my wife got in
> a car crash. Everybody was fine, but I started
> wondering about what would happen if everybody wasn’t
> fine, and the other party sued us.
You might be sued anyway. But insurance should take care of that. If your properties are in separate land trusts, your name won’t come up as owning anything. So you appear “broke”.
> Is this why one would put the property into a land
> trust, with the LLC listed as the beneciary?
> . . . but I might not have a solid idea of how well
> an LLC or corporation can work to protect you.
Bill Bronchick outlines all this stuff in his courses. It might be a good idea to get some of them to see what you actually have and how to use it effectively.
In my view, this is not an area to “scrimp”.