[SK in CV]

[quote=Fearful]
– Finally, I know well about companies being created to shield the owner’s assets from liability for the company’s actions, but not the other way around. If you own a company, and creditors come after you, the company (and its assets) are part of the pool of assets the creditors come after. [/quote]

That’s a great point that I completely missed! Ownership of the home inside an LLC offers zero protection against creditors. Even worse than relatively small homeowners exemption, there is NO exemption. It would be subject to the exact same exposure to creditors as ownership of stock in a publicly traded company.

[SK in CV]

[quote=Fearful]
– Finally, I know well about companies being created to shield the owner’s assets from liability for the company’s actions, but not the other way around. If you own a company, and creditors come after you, the company (and its assets) are part of the pool of assets the creditors come after. [/quote]

That’s a great point that I completely missed! Ownership of the home inside an LLC offers zero protection against creditors. Even worse than relatively small homeowners exemption, there is NO exemption. It would be subject to the exact same exposure to creditors as ownership of stock in a publicly traded company.

[SK in CV]

[quote=Fearful]
– Finally, I know well about companies being created to shield the owner’s assets from liability for the company’s actions, but not the other way around. If you own a company, and creditors come after you, the company (and its assets) are part of the pool of assets the creditors come after. [/quote]

That’s a great point that I completely missed! Ownership of the home inside an LLC offers zero protection against creditors. Even worse than relatively small homeowners exemption, there is NO exemption. It would be subject to the exact same exposure to creditors as ownership of stock in a publicly traded company.

[SK in CV]

[quote=Fearful]
– Finally, I know well about companies being created to shield the owner’s assets from liability for the company’s actions, but not the other way around. If you own a company, and creditors come after you, the company (and its assets) are part of the pool of assets the creditors come after. [/quote]

That’s a great point that I completely missed! Ownership of the home inside an LLC offers zero protection against creditors. Even worse than relatively small homeowners exemption, there is NO exemption. It would be subject to the exact same exposure to creditors as ownership of stock in a publicly traded company.

[SK in CV]

[quote=earlyretirement]Hi SK in CV,

Actually, no…. according to the lawyer, the LLC doesn’t need to be registered in California as no business is being conducted. In Delaware there is a $200 annual fee/tax.

See this:

http://www.aoausa.com/Articles/2010/February/12.pdf

I’ve done some research online and it seems like some people are getting homeowner’s insurance but just not so easy like an individual.

No, there is no pending bankruptcy (actually I have no debt whatsoever). As mentioned, the goal of this is simply asset protection. People that have no assets or tons of debt don’t really have to worry about asset protection I wouldn’t think…

What I meant by the “homestead exemption” was that you can’t lose your house in Texas due to some frivolous lawsuit or something else. I know that many many people in California use Living Trusts but those don’t seem to do anything for asset protection.

Again, I’m not sure why an insurance company would have a problem with this if they simply understood that there is no business being conducted at all. They have no more risk vs. it being in my own name. The house won’t be rented out and we would be the only ones using it. Heck, we wouldn’t even have a mortgage on the property.

Of course I’ll still get an umbrella coverage policy but my main goal is getting the home insured with the same price as an individual homeowner’s policy.[/quote]

You could be right on the purchase and owning of the property. But renting it or selling it would qualify as “doing business”.

I explained why an insurance company would have a problem. LLC’s don’t have a primary residence. Real people do. You are not the same as an entity you own. Exactly the same reason a lender is unlikely to make a loan to an LLC in this circumstance. Same with the IRS. Primary residence benefits don’t all flow through.

If bankruptcy isn’t a current issue (which is pretty much the only time a homeowners exemption would come into play), just buy insurance. It’s cheaper, simpler, and probably more effective.

[SK in CV]

[quote=earlyretirement]Hi SK in CV,

Actually, no…. according to the lawyer, the LLC doesn’t need to be registered in California as no business is being conducted. In Delaware there is a $200 annual fee/tax.

See this:

http://www.aoausa.com/Articles/2010/February/12.pdf

I’ve done some research online and it seems like some people are getting homeowner’s insurance but just not so easy like an individual.

No, there is no pending bankruptcy (actually I have no debt whatsoever). As mentioned, the goal of this is simply asset protection. People that have no assets or tons of debt don’t really have to worry about asset protection I wouldn’t think…

What I meant by the “homestead exemption” was that you can’t lose your house in Texas due to some frivolous lawsuit or something else. I know that many many people in California use Living Trusts but those don’t seem to do anything for asset protection.

Again, I’m not sure why an insurance company would have a problem with this if they simply understood that there is no business being conducted at all. They have no more risk vs. it being in my own name. The house won’t be rented out and we would be the only ones using it. Heck, we wouldn’t even have a mortgage on the property.

Of course I’ll still get an umbrella coverage policy but my main goal is getting the home insured with the same price as an individual homeowner’s policy.[/quote]

You could be right on the purchase and owning of the property. But renting it or selling it would qualify as “doing business”.

I explained why an insurance company would have a problem. LLC’s don’t have a primary residence. Real people do. You are not the same as an entity you own. Exactly the same reason a lender is unlikely to make a loan to an LLC in this circumstance. Same with the IRS. Primary residence benefits don’t all flow through.

If bankruptcy isn’t a current issue (which is pretty much the only time a homeowners exemption would come into play), just buy insurance. It’s cheaper, simpler, and probably more effective.

[SK in CV]

[quote=earlyretirement]Hi SK in CV,

Actually, no…. according to the lawyer, the LLC doesn’t need to be registered in California as no business is being conducted. In Delaware there is a $200 annual fee/tax.

See this:

http://www.aoausa.com/Articles/2010/February/12.pdf

I’ve done some research online and it seems like some people are getting homeowner’s insurance but just not so easy like an individual.

No, there is no pending bankruptcy (actually I have no debt whatsoever). As mentioned, the goal of this is simply asset protection. People that have no assets or tons of debt don’t really have to worry about asset protection I wouldn’t think…

What I meant by the “homestead exemption” was that you can’t lose your house in Texas due to some frivolous lawsuit or something else. I know that many many people in California use Living Trusts but those don’t seem to do anything for asset protection.

Again, I’m not sure why an insurance company would have a problem with this if they simply understood that there is no business being conducted at all. They have no more risk vs. it being in my own name. The house won’t be rented out and we would be the only ones using it. Heck, we wouldn’t even have a mortgage on the property.

Of course I’ll still get an umbrella coverage policy but my main goal is getting the home insured with the same price as an individual homeowner’s policy.[/quote]

You could be right on the purchase and owning of the property. But renting it or selling it would qualify as “doing business”.

I explained why an insurance company would have a problem. LLC’s don’t have a primary residence. Real people do. You are not the same as an entity you own. Exactly the same reason a lender is unlikely to make a loan to an LLC in this circumstance. Same with the IRS. Primary residence benefits don’t all flow through.

If bankruptcy isn’t a current issue (which is pretty much the only time a homeowners exemption would come into play), just buy insurance. It’s cheaper, simpler, and probably more effective.

[SK in CV]

[quote=earlyretirement]Hi SK in CV,

Actually, no…. according to the lawyer, the LLC doesn’t need to be registered in California as no business is being conducted. In Delaware there is a $200 annual fee/tax.

See this:

http://www.aoausa.com/Articles/2010/February/12.pdf

I’ve done some research online and it seems like some people are getting homeowner’s insurance but just not so easy like an individual.

No, there is no pending bankruptcy (actually I have no debt whatsoever). As mentioned, the goal of this is simply asset protection. People that have no assets or tons of debt don’t really have to worry about asset protection I wouldn’t think…

What I meant by the “homestead exemption” was that you can’t lose your house in Texas due to some frivolous lawsuit or something else. I know that many many people in California use Living Trusts but those don’t seem to do anything for asset protection.

Again, I’m not sure why an insurance company would have a problem with this if they simply understood that there is no business being conducted at all. They have no more risk vs. it being in my own name. The house won’t be rented out and we would be the only ones using it. Heck, we wouldn’t even have a mortgage on the property.

Of course I’ll still get an umbrella coverage policy but my main goal is getting the home insured with the same price as an individual homeowner’s policy.[/quote]

You could be right on the purchase and owning of the property. But renting it or selling it would qualify as “doing business”.

I explained why an insurance company would have a problem. LLC’s don’t have a primary residence. Real people do. You are not the same as an entity you own. Exactly the same reason a lender is unlikely to make a loan to an LLC in this circumstance. Same with the IRS. Primary residence benefits don’t all flow through.

If bankruptcy isn’t a current issue (which is pretty much the only time a homeowners exemption would come into play), just buy insurance. It’s cheaper, simpler, and probably more effective.

[SK in CV]

[quote=earlyretirement]Hi SK in CV,

Actually, no…. according to the lawyer, the LLC doesn’t need to be registered in California as no business is being conducted. In Delaware there is a $200 annual fee/tax.

See this:

http://www.aoausa.com/Articles/2010/February/12.pdf

I’ve done some research online and it seems like some people are getting homeowner’s insurance but just not so easy like an individual.

No, there is no pending bankruptcy (actually I have no debt whatsoever). As mentioned, the goal of this is simply asset protection. People that have no assets or tons of debt don’t really have to worry about asset protection I wouldn’t think…

What I meant by the “homestead exemption” was that you can’t lose your house in Texas due to some frivolous lawsuit or something else. I know that many many people in California use Living Trusts but those don’t seem to do anything for asset protection.

Again, I’m not sure why an insurance company would have a problem with this if they simply understood that there is no business being conducted at all. They have no more risk vs. it being in my own name. The house won’t be rented out and we would be the only ones using it. Heck, we wouldn’t even have a mortgage on the property.

Of course I’ll still get an umbrella coverage policy but my main goal is getting the home insured with the same price as an individual homeowner’s policy.[/quote]

You could be right on the purchase and owning of the property. But renting it or selling it would qualify as “doing business”.

I explained why an insurance company would have a problem. LLC’s don’t have a primary residence. Real people do. You are not the same as an entity you own. Exactly the same reason a lender is unlikely to make a loan to an LLC in this circumstance. Same with the IRS. Primary residence benefits don’t all flow through.

If bankruptcy isn’t a current issue (which is pretty much the only time a homeowners exemption would come into play), just buy insurance. It’s cheaper, simpler, and probably more effective.

[SK in CV]

It seems kind of obvious to me anyway. An LLC, by very definition, is a business or investment entity, therefore if an LLC owns property, it can’t be a primary residence. You’ll have to get business insurance (as if the house was a rental, minus all the extra deductions a rental can generate), which will probably be a bit more expensive and won’t cover contents. You should be able to get a reasonably priced renters policy for that. You’ll also have to register the LLC in California, and pay $800 minimum tax every year, in addition to annual registration fees (I think that’s $25 a year.)

Might be better off purchasing the home in your own name, with as large a mortgage as possible, then transferring it to the LLC, and buy all appropriate umbrella coverage. Unless of course, the homestead exemption is important to you because of a pending bankruptcy. In which case that transfer to the LLC would be voidable as a fraudulant conveyance.

If your attorney knew what you were planning on doing, he/she really should have advised you of the potention pitfalls.

[SK in CV]

It seems kind of obvious to me anyway. An LLC, by very definition, is a business or investment entity, therefore if an LLC owns property, it can’t be a primary residence. You’ll have to get business insurance (as if the house was a rental, minus all the extra deductions a rental can generate), which will probably be a bit more expensive and won’t cover contents. You should be able to get a reasonably priced renters policy for that. You’ll also have to register the LLC in California, and pay $800 minimum tax every year, in addition to annual registration fees (I think that’s $25 a year.)

Might be better off purchasing the home in your own name, with as large a mortgage as possible, then transferring it to the LLC, and buy all appropriate umbrella coverage. Unless of course, the homestead exemption is important to you because of a pending bankruptcy. In which case that transfer to the LLC would be voidable as a fraudulant conveyance.

If your attorney knew what you were planning on doing, he/she really should have advised you of the potention pitfalls.

[SK in CV]

It seems kind of obvious to me anyway. An LLC, by very definition, is a business or investment entity, therefore if an LLC owns property, it can’t be a primary residence. You’ll have to get business insurance (as if the house was a rental, minus all the extra deductions a rental can generate), which will probably be a bit more expensive and won’t cover contents. You should be able to get a reasonably priced renters policy for that. You’ll also have to register the LLC in California, and pay $800 minimum tax every year, in addition to annual registration fees (I think that’s $25 a year.)

Might be better off purchasing the home in your own name, with as large a mortgage as possible, then transferring it to the LLC, and buy all appropriate umbrella coverage. Unless of course, the homestead exemption is important to you because of a pending bankruptcy. In which case that transfer to the LLC would be voidable as a fraudulant conveyance.

If your attorney knew what you were planning on doing, he/she really should have advised you of the potention pitfalls.

[SK in CV]

It seems kind of obvious to me anyway. An LLC, by very definition, is a business or investment entity, therefore if an LLC owns property, it can’t be a primary residence. You’ll have to get business insurance (as if the house was a rental, minus all the extra deductions a rental can generate), which will probably be a bit more expensive and won’t cover contents. You should be able to get a reasonably priced renters policy for that. You’ll also have to register the LLC in California, and pay $800 minimum tax every year, in addition to annual registration fees (I think that’s $25 a year.)

Might be better off purchasing the home in your own name, with as large a mortgage as possible, then transferring it to the LLC, and buy all appropriate umbrella coverage. Unless of course, the homestead exemption is important to you because of a pending bankruptcy. In which case that transfer to the LLC would be voidable as a fraudulant conveyance.

If your attorney knew what you were planning on doing, he/she really should have advised you of the potention pitfalls.

[SK in CV]

It seems kind of obvious to me anyway. An LLC, by very definition, is a business or investment entity, therefore if an LLC owns property, it can’t be a primary residence. You’ll have to get business insurance (as if the house was a rental, minus all the extra deductions a rental can generate), which will probably be a bit more expensive and won’t cover contents. You should be able to get a reasonably priced renters policy for that. You’ll also have to register the LLC in California, and pay $800 minimum tax every year, in addition to annual registration fees (I think that’s $25 a year.)

Might be better off purchasing the home in your own name, with as large a mortgage as possible, then transferring it to the LLC, and buy all appropriate umbrella coverage. Unless of course, the homestead exemption is important to you because of a pending bankruptcy. In which case that transfer to the LLC would be voidable as a fraudulant conveyance.

If your attorney knew what you were planning on doing, he/she really should have advised you of the potention pitfalls.

[SK in CV]

[quote=Jazzman]This is a pretty tasteless home. If I had the money, I’d be looking in Ranch Santa Fe. It’s where money and savoir faire are in more close proximity.[/quote]

If you’re looking with the OP’s parameters of under $1M, you might be looking for a very long time.

To each his own.

[Author]

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