When using a confidence, the investor may not wish to be the trustee, and the trust need not incorporate the investor’s name. To assure privacy, a generic name may be used for the thing .
In the case of any real estate investment that happens South Florida Real Estate to be encumbered with debt, the debtor’s name will appear on the recorded deed of trust, even when title has been taken in the title of a trust or an LLC. But when the investor guarantees the loan by acting AS the borrower via the trust entity, THEN the debtor’s name could be kept confidential! Now that the Trust thing becomes the debtor and the owner of the house. This insures the investor’s name does not show up on any recorded documents.
Because formalities, like holding annual meetings of shareholders and maintaining annual minutes, are not required in the event of limited partnerships and LLCs, they are usually preferred over corporations. Struggling to observe corporate formalities can result in failure of the liability shield between the individual investor as well as the corporation. This collapse in legal terms is known as”piercing the corporate veil”.
Limited partnerships and LLCs can make a more effective asset protection stronghold compared to corporations, since assets and interests may be more challenging to reach by lenders to the buyer.
To exemplify this, let’s assume an individual in a company owns, say, an apartment complex and this company receives a decision against it with a creditor. The creditor can now induce the borrower to turn over the inventory of the corporation which can lead to a devastating loss of corporate assets.
But when the debtor owns the apartment building through either a Limited Partnership or an LLC the creditor’s recourse is limited to an easy charging arrangement, which places a lien on distributions from the LLC or limited partnership, but retains the creditor from seizing venture assets and retains the creditor out the affairs of the LLC or Partnership.