This is Part 3 of our four-part series of blog posts where we are sharing the basics of using Limited Liability Companies (LLCs) as part of your asset protection plan. In Part 1 of this series we gave an introduction to LLCs. If you missed Part 1 of the series, you can check it out here: Part 1 – Introduction to LLCs. Last week in Part 2 of the series we shared how an LLC is taxed. If you missed Part 2 of the series, here is the link: Part 2 – How is an LLC Taxed? In today’s post we discuss how to use LLCs to own your investment real estate. Next week we will wrap up this blog post series in Part 4 – Downside to Using Florida LLCs, with a discussion about the downside to using Florida LLCs and a brief discussion of why it can be beneficial to use LLCs formed in other states as a part of your asset protection plan. Using LLCs to Own Investment Real Estate Individual and joint ownership of real estate, other than your homestead, is not recommended. Individual owners of real estate are personally liable for debts and liabilities arising from the real estate. Joint owners of real estate, including tenants in common and joint tenants with the right of survivorship, have joint and several personal liability for debts and liabilities arising from the real estate. In addition, an individual or joint owner’s interest in the real estate can be seized by a personal creditor of the owner. Joint ownership of real estate as tenants in common or joint tenants with the right of survivorship creates an additional set of problems involving management and control of the property. Further, when the owner of a tenant in common interest in real estate dies, the owner’s interest is subject to probate proceedings in the jurisdiction where the real estate is located. Consequently, it is recommended that all non-homestead real estate be owned by limited partnerships (“LPs”) or limited liability companies (“LLCs”). For married couples, additional asset protection can be achieved by owning the LP or LLC as tenants by the entirety. Segregating risky assets and businesses into separate entities away from other assets, especially safe assets, is always a good idea from an asset protection point of view. For example, an individual who owns a gas station and a rental home should not own both within the same entity. Neither should an individual with a large amount of liquid assets (cash, securities, etc.) hold them in the same entity as a business. Best practices would dictate that every distinct business or valuable asset is segregated into a different limited liability entity. In an ideal situation, someone with five rental properties would have five separate LLCs, one for each property. Check back next week for the final blog post in this four-part series about LLCs. If you are interested in using LLCs as part of your asset protection plan, give our office a call at (407) 273-1045. Our experienced attorneys can help you design an asset protection plan that meets your personal needs and goals.