Lawsuits Against a Series LLC Vs. A Traditional LLC

The more money you have located inside of any individual LLC, the more attractive it’s going to be for someone to sue you. It makes sense, right? Lawsuits are all about how much money can I get out of somebody, and if there’s a million dollars sitting inside of an LLC in equity or cash, well, that might be something that I really wanna go after.

It’s for this reason that me and my colleagues think you should limit the equity of any individual LLC to $200,000.

This is not the case if you’re using a Series LLCs, because Series LLCs allow you to compartmentalize those assets. So, you don’t have the same worries there that we do inside of a traditional LLC. However, I think that usually a few million dollars inside a Series LLC makes it reasonable to be able to create a new entity just in case. Why not? Expenses that you’re being able to incur by having to create a new series LLC, are far less than the amount of risk that you pose when you’re risking millions of dollars in equity.

My name is Scott Smith. I’m an asset protection attorney out of Austin Texas and I want to help you. Set up  a consultation today!

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.

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