Photo of Eric R. Ebbert, CFP®, MBA, CEO Eric R. Ebbert, CFP®, MBA, CEO Jul 04, 2020

You have worked hard to build up your finances and accumulate assets that make up your wealth. However, in a culture where lawsuits are common and anyone is vulnerable to legal trouble for a number of reasons, you are at risk of losing your assets if you do not have a plan in place to protect them. 

One of your most important assets, your real estate, should be no exception. Whether it is your personal property or property in which you have invested in, without a plan in place, creditors and the IRS may come after them in circumstances of legal or financial trouble. Fortunately, there are safe and legal avenues you can use to protect your assets and help prevent the loss of real estate to creditors or the IRS. 

Forming a real estate asset protection plan

  1. Insurance — Natural and manmade disasters can damage your real estate, affecting its value and leaving you with expenses to cover out of your pocket. Make sure that any property you own, whether residential or business, is covered by a comprehensive insurance plan.

For property investors, remember to frequently consult your plan and increase your coverage as your portfolio grows. A financial professional can help you navigate your coverage and the features you need that can help protect the value of your real estate.

  1. LLC — To help keep creditors from having access to your personal assets in the event you owe money in a lawsuit, you should purchase your real estate under a registered LLC (limited liability company) and rent it to yourself. Because an LLC’s assets are considered business assets, creditors coming after your personal assets will not have access to your real estate.

    For people who own multiple real estate properties, consider registering them under different LLCs. In the event that one asset faces a risk, the others under different LLCs should be safe.
  2. Estate planning — Estate planning is the preparation of delegating responsibilities of your assets in the event of your death or during your life if you are incapable of managing them. Without an estate plan in place, your assets, including your real estate, are subject to your state’s regulation for personal property in the event that you are unable to manage them or you have passed away. Often, the state’s plan is less than favorable for you and your intended beneficiaries, so having an estate plan in place ensures your property goes to someone you trust with it.

Let a ProVise CFP® professional help you protect your real estate assets

Real estate asset protection looks differently for everyone depending on the type of real estate they own, how much they own and how much value it has. Having a plan in place for protecting your assets helps to mitigate your liability. At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can help you form a plan to protect your assets and your real estate from creditors.

We will work closely with you to get to know your goals and values to help draft a plan that works best for you at a fiduciary standard of care. All of our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid. 

Are you ready to talk to a financial professional about protecting your real estate and other assets from creditors? Contact ProVise today to schedule a complimentary consultation.