Insurance Products to Protect Client Assets

  • Insurance Products to Protect Client Assets

    Posted by FLH Team on August 11, 2024 at 12:40 am

    In the dynamic world of financial planning, safeguarding client assets is paramount. Insurance products play a pivotal role in creating protective layers against unforeseen events, ensuring that hard-earned assets aren’t eroded overnight. From life and liability insurance to specialized asset protection policies, the options are vast and often complex. This forum is dedicated to exploring, comparing, and understanding the myriad of insurance products available today. Whether you’re an insurance professional, financial advisor, or someone seeking to protect their assets, join the conversation, share insights, and discover the best tools and strategies to ensure peace of mind for you and your clients.

    Joan Silva replied 3 months ago 4 Members · 3 Replies
  • 3 Replies
  • Steven Russo

    Member
    February 21, 2024 at 6:00 pm

    Hi all,

    Currently residing in California and have 3 rental properties within the state—2 designated for long-term rentals and one for short-term stays. These properties are presently registered under my personal name. I’m deliberating on the optimal structure for my circumstances. Though I’ve encountered options such as the WY LLC and DST, I’m uncertain if these complex arrangements are well-suited to my current situation and would love to hear about your thoughts.

    I also want to make sure I have good insurance, what should I look out for in my insurance policy to make sure they cover the common liability / accident claims? Would you recommend getting a high liability limit for each property or should I get an umbrella policy?

    I appreciate any insights you can provide. Thanks!

  • Lynette MItchell

    Member
    February 22, 2024 at 4:48 pm

    If they have leverage on them it might be best to hold onto them under your name for now. In California, you’re looking at nearly $1k a year just to register the LLC, so it’s a bit pricey. Just make sure you’ve got a solid umbrella policy in place. If you pay them off first and then think about refinancing, that might be a good opportunity to transfer them to an LLC and secure financing under that. But I’ve been told that getting financing under your name and then moving them to an LLC doesn’t really give you proper asset protection.

  • Joan Silva

    Member
    February 22, 2024 at 5:08 pm

    Well, California tends to be more of a hassle compared to other states when it comes to taxes and paperwork. Even if you set up an LLC outside of California, if you’re running the show from here, you’ll likely be considered to be “doing business” in the state and thus subject to California taxes. There’s a flat minimum tax of $800 per year per LLC in California, and it goes up if you’re pulling in over $250k in gross receipts. So, if you form an LLC in another state, chances are you’ll still have to register it as a foreign LLC here in California. Similarly, if you went the other way and formed a California LLC, you might have to register it as a foreign LLC in the state where you’re actually doing business or holding property. This means you’ll probably end up shelling out registration and filing fees in at least two states if you’re not buying property in California as a resident.

    Make sure to give your accountant a heads up that you might need to start filing non-resident income tax returns in every state where you own property. California taxes its residents on income earned worldwide but might offer a credit for taxes paid to other states.

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