Client has 4 rental properties, some are in LLCs some are not. Client has told me their attorney advised to skip the LLCs since they are $800 each in CA and just get a large umbrella liability policy. This is the first I’ve heard of this advice. Client has substantial net worth and it seems their entire holdings could be on the hook if there were a lawsuit from one of the rentals. Am I wrong to assume the separate legal LLC entity will protect the client’s other assets? For years I’ve had clients who’s attorneys set up their properties in LLC’s. As always, I appreciate your input.
IT’s really depends on the situation. If the policy will cover any mold claims, it’s not a bad idea. Remember that if you are found personally negligent as well as the LLC, the umbrella policy is important. We have recommended insurance rather than an LLC if liability is the only issue. I’d just check on the mold issue and get recommendation in writing!