Zohan

How do you tittle your car? I was advised by my attorney to have my cars transferred in to separate LLC as it is a asset but also can be a liability. This will separate it from other assets for $ protection. The cost of creating an LLC is about $400 and $200-500/yr to maintain it depending on state. My business is under LLC and he is saying that house, cash, kids college saving plan and cars all should have its own separate LLCs as kind of insurance. Not that I am cheap but I hate wasting $ on crap I don't need year after year.... Ok I am a cheap basted Is anyone doing this? You thoughts?

tejstar01

Yes it protects you from a huge lawsuit if someone hits you or frames you for an accident when they sue you they can only get what is in the LLC! I know a lot of people do this when owning exotic cars like Ferrari and Lamborghini since they are a magnet but honestly for a Porsche this maybe overkill but it's your call IMO.

Team Plutonium

Seriously, he is suggesting an LLC for all of that? Have fun filing 10 different returns each year, and pay for annual licenses, although I have the feeling he suggested to open them all in Delaware.

Noah Fect

LLCs are filed on your own 1040, if you set them up as sole proprietorships. But they also provide little if any "corporate veil" protection against personal liability. I wouldn't bother.

(Not a lawyer, not legal advice.)

socalsteve

Why don't you just get the maximum car insurance and then an umbrella policy over and above that? Cheap protection...

enzom

So there are two ways of losing your shirt if you (God forbid) are involved in an accident - being the owner who fails to control who drives your car, and being the driver. If you are driving your car, it doesn't matter who owns it. You're on the hook as the operator. If you are so careless as to let your drunk buddy take a spin, then maybe you make it harder for someone to pursue you by titling the vehicle through a corporation. But it is likely not going to stop someone from suing you and attacking your corporate structure to get to you.

Team Plutonium

It also depends where you live. New York for example is a no-fault state.

rpilot

@Zohan.. Technically your attorney is right.. but really? Sounds like an overkill, an LLC for everything and I am sure he will bill you every year for his fees in maintaining them for you.

AFAIK, NoahFect is correct. The " LLC veil " is easily pierced when it comes to such things if need be.

Also, socalsteve is giving you good advice in my opinion with the umbrella policy. If you are a person of sufficient means and assets to protect, umbrella policies and trusts are your friend.

I will also second Team Plutonium's advice.

*** Not an attorney. Not Legal advice. It's worth what you paid for it***

Zohan

Yes, Delaware for a car. My company LLC in registered in Wyoming.

From what I am told:
- if the judgment in made against me/ my company it would have to also be made against the LLC holding the assets under the law of the state LLC is formed in. Delaware and few other stated don't allow for a fault of one individual or a company to be transferred to on other LLC. LLC assets don't belong to the CEO and are not his/hers.

- Alaska LLC is best used as a saving plan for your kinds school - it don't require disclosure to FAFSA when your kid is applying for student aid. A kid who's parents saved up some cash is not likely to get any financial aid for college.

-a trust administrator has a full control of assets in a trust and can me made not valid by a judge.

Homeles

A trust. LLC's are worthless in court

Zohan

I got 250/500k coverage on the cars
What dose umbrella do for you?

Zohan

It feels like an overkill and a waste of $ to me. That's why I am asking for your thoughts

I do my LLCs via CorpNet, no charge from the lawyer

I keep my NFA toys (full auto guns, silencers...) in a trust but for other reasons

Zohan

Just having to go to out of state court (initial time and money investment) offers additional deterrent


LLC might be a way to save on car insurance if your driving record is not so hot

Porsche Jeff

That is what insurance is for and an umbrella policy. I think the suggestion of the title in an LLC is like belt and suspenders. I am a practicing CPA (not a lawyer) and have never heard this kind of advice is over 30 years of practice, and do a fair amount of asset protection advice with my clients. I think without any profit motive, the LLC as someone else suggested will probably not prevail for protection in court.

Homeles

Thanks for the confirmation. LLC's are worthless in court. Set up a trust. Too many layers if it's set up properly. The plaintiff will give up after time.

(Yes, I'm an attorney, but please don't shot the messenger)