How Land Trusts and Series LLCs Work Together

 Posted on June 13, 2024 in Asset Protection & Wealth Preservation

Real estate investors would be wise to take steps to limit their liability and protect each individual investment property. There are real risks associated with real estate investing, no matter how cautiously you plan your projects and how carefully you select the properties you buy. A single high-dollar lawsuit can collapse a budding real estate empire in the absence of proper legal structuring. One way to limit your risk is to create a series LLC in conjunction with a series of land trusts. Structuring these entities properly can be legally complex, so you must work with an experienced Yorkville, IL real estate investments attorney.

Asset Protection Through a Series LLC

A series LLC is a type of limited liability corporation that can hold numerous subsidiary companies under the same corporate umbrella. This structure offers the convenience of managing a single LLC rather than creating numerous corporate entities. Each time you invest in a new real estate project, you would open a new series. Creating a series LLC can allow you to keep different real estate projects separate so that if one becomes financially compromised by a lawsuit or other liabilities, the rest are not affected. So, if Series A is sued, assets contained in Series B and C are safe from liability.

Adding a Layer of Protection with Land Trusts

Using a series LLC prevents others from linking your real estate assets to each other for purposes of satisfying a debt or judgment. Using a land trust prevents your real estate investment assets from being linked to you personally and your privately held assets. By placing each investment property under the ownership of a land trust, you can retain control of each property and the profits they generate without the liability of owning them in your own name or having them owned by a corporation you own.

Land trusts can also provide you with a higher degree of privacy if you wish to limit how your name appears in public records. If your land trusts own each property separately, it will be difficult for others to link your name to each of your investments or even to tell how many properties you own. This makes it challenging for the public to determine the degree of your wealth.

Contact a Yorkville, IL Asset Protection Attorney

Gateville Law Firm is skilled in protecting complex real estate investment assets. Experienced Kendall County, IL real estate investment lawyer Sean Robertson has an extensive background in addressing advanced real estate matters. Contact us at 630-780-1034 for a complimentary consultation.