Under Ohio law, if you own real estate in your name, rather than through an entity such as a limited liability company, all of your assets are at risk and could be lost if a problem arises as to the property.
Owning real estate for investment, especially residential and commercial real estate is inherently risky. Life happens, accidents happen, and people can and do get hurt on the property. When injury or death occurs on property that they do not own, that person or their heirs look inevitably to the owner of the property to recover damages.
There are several steps that can and should be taken to protect you, your family and your assets against any potential liability and damage.
First and foremost, make sure your property is insured. But remember, however, damages can exceed the amount of insurance coverage you have in place. For instance, if you have a $1,000,000 policy in place and an injured person suffers damages in the amount of $2,000,000 you have a problem. You may be personally liable for the $1,000,000 above the insurance policy in place thus putting your personal assets in jeopardy.
To avoid risking your personal assets should a damage claim exceed your insurance policy limits, the second line of defense is putting your property in a limited liability company (“LLC”).
Thus, in the scenario above, if a court awarded damages in excess of the insurance coverage and the property was in an LLC and correctly operated, the injured person most likely should only be able to collect against the LLC’s assets and your personal assets outside the LLC should be protected.
The cost to form and hold property in an LLC in Ohio is insignificant to the potential damages you could suffer by failing to take basic steps to minimize your risk and protect your assets.
Contact the attorneys at Painter & Associates, LLC to begin the process of protecting your investment and hard work.