A new twist on real estate LLCs

Despite benefits, not all states recognize setup

Learn the New Luxury Playbook at Luxury Connect | October 18-19 at the Beverly Hills Hotel

DEAR BENNY: I read with interest what you wrote about putting rental properties in LLCs. What can you tell me about the new series LLCs for real estate investors? It appears they can be formed only in certain states, but would they be recognized in all states? --Elizabeth DEAR ELIZABETH: The "series LLC" is a new, untested concept. Oversimplified, it is a "master" limited liability company, composed of two or more limited liability companies. I have always recommended that real estate investors put their property into an LLC. But if you own two properties, each should be titled in the name of a separate LLC. Why? Because if a tenant in one of your properties decides to sue you -- and you do not have adequate insurance coverage, or if the lawsuit is based on a matter that is excluded from your coverage -- you could lose all of the assets in that LLC. So if you have two properties in the same LLC, both properties could be sold to satisfy any judgment agai...