Should title to my real property be in the name of an LLC?
Question Details: I would like to form an LLC for my rental property. Must I re-title the property from my personal name to the name of the LLC? If so, why? I thought one advantage of an LLC is to limit liability in the case of a lawsuit. Wouldn't any asset in the LLC be at risk in the event of a lawsuit or is having property title in the LLC name establishing legitimacy of the LLC?
1) Yes, a property in an LLC is at risk in the event of a lawsuit against the LLC.
2) If you own the property in your own name, however, and there is some lawsuit arising out of the property (e.g. if someone is injured on it, from what they claim or allege is an unsafe condition), you personally can be sued, which means your personal income, assets, etc. are at stake--including the rental property, since in this scenario, since it's in your name and thus an asset of your personally. By having the property in your name, not an LLC, you are personally vulnerable to a lawsuit arising out of the property. To protect yourself, you should put the property into the LLC.