personal residence in LLC

[ugabulldog]

GA

I have researched this extensively and know about the tax disadvantages, due on sale clause, importance of keeping records and meeting state LLC requirements, etc.....

If I own rental property in an LLC and want to put my personal house into a SEPERATE partnership (spouse) LLC, based on it is where my office is and where I store tools and equipment used in rentals. Reason being to protect it from personal creditors, from attaching a lien to house. All I have found is it would depend on the judge. Does this sound correct? Thanks

EDIT: This would be done ahead of debt as a precaution

 

[FlyingRon]

Um, in Georgia, your "homestead" is already protected against most judgments and creditors. Further, putting your business tools in your personal llc, opens it up for liability claims against that llc. Further, if you are found PERSONALLY liable, your ownership in all these LLCs is definitately an asset that can be potentially attached.

 

[ugabulldog]

GA homestead is only $10,000

 

[Zigner]

GA homestead is only $10,000

Doesn't matter much - as you were told, the LLC doesn't do much to protect your "stuff" against personal judgments, since your ownership of the LLC is an asset.

 

[Taxing Matters]

GA

I have researched this extensively and know about the tax disadvantages, due on sale clause, importance of keeping records and meeting state LLC requirements, etc.....
If I own rental property in an LLC and want to put my personal house into a SEPERATE partnership (spouse) LLC, based on it is where my office is and where I store tools and equipment used in rentals. Reason being to protect it from personal creditors, from attaching a lien to house. All I have found is it would depend on the judge. Does this sound correct? Thanks

There are two problems here. First, even if your personal creditors could not file a lien directly against the house while held by a LLC, the creditor may well be able to instead take the LLC itself as an asset of yours (thus all all the LLC assets) to satisfy the debt. The second problem is that putting your personal residence in a LLC effectively serves to destroy the distinction between you and the LLC as a separate entity. When the LLC commingles business and personal assets you set up a great case for a creditor to argue that the separate existence of the LLC should be disregarded anyway. In short, doing this is not likely to accomplish your goal here. At best you might create an extra hoop or two for the creditor to go through to reach the house.

 

[despritfreya]

I. . . want to put my personal house into a SEPERATE partnership (spouse) LLC,. . . Reason being to protect it from personal creditors, from attaching a lien to house.

You might want to research. . .

Georgia Code, Title 18 - Chapter 2 - Article 4 - Uniform Voidable Transactions Act

Your transfer may very well be subject to being set aside as a fraudulent conveyance.

Des.

 

[ugabulldog]

You might want to research. . .

Georgia Code, Title 18 - Chapter 2 - Article 4 - Uniform Voidable Transactions Act

Your transfer may very well be subject to being set aside as a fraudulent conveyance.

Des.

I should of been more clear, I would be doing this before any debt was incurred, as a precautionary measure.

 

[ugabulldog]

Doesn't matter much - as you were told, the LLC doesn't do much to protect your "stuff" against personal judgments, since your ownership of the LLC is an asset.

It is my understanding creditors have access to any payouts I receive from LLC but not to the LLC itself.

 

[Zigner]

It is my understanding creditors have access to any payouts I receive from LLC but not to the LLC itself.

You may want to follow up on that with a business attorney. If you own something, it is an asset. With some exceptions, your assets can be taken to satisfy a judgment.

 

[STEPHAN]

It is my understanding creditors have access to any payouts I receive from LLC but not to the LLC itself.

That is not correct.

 

[ugabulldog]

That is not correct.

Can you give me a source? All th information I have found says a charging order is the only remedy in GA.