If you are a landlord, you may be concerned about lawsuits. People could get injured on property that you own, and you could be targeted. Clearly, this is a legitimate concern, because litigious types are always looking for vulnerabilities.
One way to protect assets if you are a landlord would be to convey your property into family limited partnerships.
First, we should explain the basic anatomy of a family limited partnership. If you establish and fund a family limited partnership, you are the general partner. You would also add family members to act as limited partners.
The general partner is the sole decision-maker. From a legal perspective, the limited partners have no say in the decision-making process.
If any partner is personally sued, assets that are held by the partnership could not be attached, and this is one asset protection benefit. In addition to this, if someone was injured on a property that was conveyed into a family limited partnership, the individual partners could not be personally sued.
To explain the value of this strategy through the utilization of a simple example, let’s say that you own three different apartment buildings. You could convey the apartment buildings into three different respective family limited partnerships.
As a result, if someone was injured in one of the buildings, they could initiate legal actions against the partnership that owned building, but they could not go after the other buildings.
We should point out the fact that you do have to be aware of fraudulent conveyances. You cannot decide to place property into a family limited partnership after you find out that you are the target of a legal action. If you were to go this route, you would be violating the law.
Free Report on Family Limited Partnerships
We have provided some very basic information about the value of family limited partnerships in this blog post, but the asset protection benefits can extend beyond this simple scenario. Plus, family limited partnerships can be useful for people who are concerned about federal transfer taxes.
If you would like to obtain some detailed information about the value of family limited partnerships, we have an informational resource that you can access quickly and easily through this website. Our firm has prepared a special report on the subject, and it is being offered on a complimentary basis at the present time.
To access your copy of the in-depth special report, visit this page and follow the simple instructions: Family Limited Partnership Report.
Our Firm Can Help
There are various different things that you can do to protect assets if you are concerned about legal actions. If you would like to discuss your options with a licensed professional, feel free to contact us through this page to set up a no obligation consultation: Indianapolis IN Asset Protection Attorneys.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.