Asset protection by Mark Warda
Mark Warda's main job is being a trustee these days. He doesn't practice as an attorney.
LLCs and Land trusts
LLC has combined advantages of the protection of a corporation and the taxes
of a partnership
FL allows single member LLCs at $50pa
FL LLCs don't have to pay state corporate income tax
Limited Liability means that you as owner aren't liable for company's debts.
If you get in trouble than your LLC isn't liable for your debts - the
creditor can pay the taxes (on the judgment amount) but not get the assets! I.e. a charging order.
Single member LLC taxes can go on 1040 rather than separate return
Have each property in a separate LLC
Use a multi member LLC to own single member LLCs which have the beneficial
interest in the trusts.
Land Trust gives no asset protection only privacy. LLC gives asset protection.
K1 tax return from partnership LLC has a very low audit profile with the IRS.
Have a management company which either
1. leases the properties from the other LLCs and sublets them to tenants
OR
2. has a contract with the LLCs to carry out management functions
Personal property should be in a personal property trust.
Don't put homestead in a land trust.
Citizens won't give liability insurance to a trust, so insure the trustee???
My broker said: I spoke to Tareq at Citizens here is what we would need to do.
The policy will have be rewritten, on a DP form naming the trust as the
owner/ named insured on the policy then name you as the additional
insured they will then omit the med pay and liability, We would have to
take out a separate policy for the liability.
From his web site, floridalandtrust.com:
How do I set up a land trust? To set up a land trust you need a deed to the trustee using the special language required by Florida statutes and you need a Land Trust Agreement. When the deed is recorded you need to file form DR-219 and you must file IRS form 56 (or a similar form or letter) with the IRS.
How much does a land trust cost? The cost of transferring a property into a land trust is $6.70 at the courthouse.
