Will an llc protect my real estate from a judgement given by a civil case?
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Will an llc protect my real estate from a judgement given by a civil case?
I believe I will be a defendant in a civil case and want to protect my real
estate asap Can an llc protect my property if I loose and a judgement is place
against me
Asked on April 13, 2019 under Real Estate Law, Missouri
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
No, in this case it will not, for one or all of the following reasons:
1) If you transfer property not for fair market value (i.e. not selling it for what is worth) when you believe you will be sued, that is considered a fraudulent transfer, made to hide assets from a potential creditor (the person suing you, who, if he or she wins, will be a "judgment creditor"). That means that the transaction can be voided or undone and the creditor can get the property.
2) If it is a one member (one owner: you) LLC which does not transact legitimate business, then they could likely "pierce the corporate veil" on the grounds that the LLC is just a shell designed to defraud creditors, and not an actual business.
3) If you are the sole owner, then the LLC itself is an asset of yours and they can potentially get the whole LLC and everything it owns anyway.
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