The rumors are true, folks: everything really is bigger in Texas. This can be a double-edged sword for real estate investors in Texas, because while the state has many big opportunities for investors of any budget, the lawsuit business is also big. And real estate investors are more likely to be sued than the average Joe or Jane. So if you want to take advantage of the many opportunities and rewards available for investors in the Lone Star State, you will definitely want to be aware of the quirks of investing here as well as how you can protect yourself. A high-quality, iron-clad asset protection plan can prevent you from ever being victimized by a suit, but it will also protect the majority of your wealth even if you are sued.
In Texas, real estate investors have special concerns about asset protection that we will review below. But we will also show you how some simple precautions, the right information, and good professional help can protect your investments and other valuable assets. Let's dive in.
The short answer is that anyone with assets worth having at all should have an asset protection plan. This is especially true for real estate investors, or other types of investors who own valuable assets of any type. The suggestions in this article work just as well for protecting an expensive vehicle or other asset as they do for real estate.
Attorneys are like vampires in more ways than we care to admit. Only instead of feeding on blood, we have an unhealthy dependency on money. And you better believe that we love money as much as vampires like blood. So asset protection keeps the legal vampires away by ensuring that they can't feed on your blood/money. Sucking the lifeblood out of a lawsuit makes it an unattractive endeavor for any attorney who might come after you or your assets. Even the most cash-thirsty lawyer in the world won't file against you if you're difficult to sue, or just plain not worth enough to make it a wise expense of his/her time. Asset protection makes you both of these things.
The Series LLC is among the strongest asset protection tools that any real estate investor can exploit. Not all LLCs are created equally, and the costs and legal protections they offer depend heavily on which state the LLC is formed in. Fortunately for Texans, you can go local. The Texas Series LLC is a highly effective asset protection structure. As an added bonus, it's easier to set up a Series LLC in your home state because you'll be free of the legal requirement to have a registered agent. Agents aren't free, so you'll be saving money by using this structure.
The Texas Series LLC is booming in popularity in part because it's the gift that keeps on giving. It operates similarly to a Traditional LLC, but has the distinct bonus of allowing you to add assets to the structure indefinitely. The Series LLC uses a parent-child structure which allows you to add new assets to the network as you acquire them. Each asset will have its own "child" LLC, complete with liability protection. In practice, this means that when you buy a new property, you will only need a few minutes at your computer and your attorney's signature to add it to your LLC network.
Anonymity is absolutely crucial to an effective asset protection plan. When you use an Anonymous Trust alongside the Series LLC in conjunction with the Series LLC, your assets receive an additional layer of protection. The Anonymous Trust allows you to own and operate the Series LLC without your name ever even appearing on it.
This method protects you by making it nearly impossible to prove you own the assets in question in the event of a lawsuit. Even if someone knows you own it, they won't be able to prove it in court. The fact that you can't be reasonably or easily connected to the property will make it nearly impossible to sue you personally. Its placement in the series limits the amount you could be sued for in the first place, making both you and the asset highly unattractive targets for us money-hungry attorneys. We don't hunt if there's nothing to feast on.
Of course, there are other tools you can use to beef up your asset protection plan. Our experts combine land trusts, contracts, and many more legal and banking strategies to design the most effective plan for you.
Don't hesitate any longer. If you're an investor in Texas, you don't want to risk the investments you've poured your heart, soul, and hard-earned resources. All it takes is one suit to clean you out of everything. Don't let the vampires get to you. Use the tips above to form an asset protection plan that is more powerful than a house full of silver stakes, garlic, and crosses. At Royal Legal Solutions, we are here to make sure you get to keep the things you've worked your whole life for. Call us today to set up an asset protection consultation, and we will help you build the best possible asset protection strategy for your individual needs. Let us deal with the vampires while you focus on your business, free from the stench of garlic or civil court.
Thanks for reading, and if you have any additional questions about investing in Texas, fire them off in the comments below. We love making sure investors have access to this important information.
Scott Royal Smith is an asset protection attorney and long-time real estate investor. He's on a mission to help fellow investors free their time, protect their assets, and create lasting wealth.
Ready to know more than your attorney? Join our community platform where you'll get immediate FREE access to all our best educational resources for real estate investors. Including 8 Masterclasses, group mentoring replays, and much, much more.
Join thousands of real estate investors in all 50 states as they enjoy exclusive content, special promotions, and behind-the-scenes access to me and my guests. No spam, ever. Just great stuff!