E&O Insurance

[DTB]

Not that I'm fond of fraud, but just how does one get sued and lose assets that they don't have??

Particularly if a family LLC owns the shares of the corporation??

 

[Lee Lansford]

Mike, it depends upon how far the person or entity suing the appraiser wants to reach.

OK, I'm not trying to "sell" any appraiser on the wisdom of having--or not having--liability insurance. I wish all good luck!

I'm not a lawyer, but if what you offer is correct, why do doctors who are members of a professional corporation carry malpractice insurance?

Oh, well...to each his own.

Lee

 

[Roseann Dufala]

From experience: Even if you are incorporated,(at least in SC), if you are sued, then whoever sues you will sue your corporation AND you, the individual, as an employee of the corporation.

 

[liberated]

There are lender's in my area that will not accept work from appraisers that do not have E&O insurance. I keep my policy up to date primarly for some peace of mind....never mind all of the omissions and riders that the insurance carrier will not cover.

 

[DTB]

Mike, it depends upon how far the person or entity suing the appraiser wants to reach.

OK, I'm not trying to "sell" any appraiser on the wisdom of having--or not having--liability insurance. I wish all good luck!

I'm not a lawyer, but if what you offer is correct, why do doctors who are members of a professional corporation carry malpractice insurance?

Oh, well...to each his own.

Lee

Lee,

The point is that the professional corp. would be exposed to lawsuits. Whatever assets in THAT corp. are vulnerable. Assets in another corp., that is not doing business, i.e. personal corp., would not be exposed.

Why carry the insurance? Probably the same reason appraisers do, someone wants to see it.

You cannot sue me and gain assets that someone else owns ( the corp.) unless that corp. is part of the enterprise you hired. That's why each separate property goes in it's own LLC, so one does not become exposed due to something happening at another property.

Not super tough to do but not many people pay enough attention to asset protection.

 

[The Warrior Monk]

Not that I'm fond of fraud, but just how does one get sued and lose assets that they don't have??

Particularly if a family LLC owns the shares of the corporation??

You can't go after assets people don't have, but I don't quite know what your getting at there.

If they do own shares in the corporation, that's an entirely different thing.

What I have seen protect assets is to give them to another, such as a spouse. For example, a contractor that I (and dozens of others) got ripped off by sold his house and used the proceeds to purchase another, and put the home under the wife's name. Now that he's done that he's declaring bancruptcy. One can attempt to put a lien on the home, but it's a major PITA.

 

[DTB]

A Family Limited Partnership ("FLP") is a limited partnership that is formed to manage and control jointly-owned family property. All the requisites of a limited partnership must be followed in order to have a valid FLP. Upon formation, the assets of the family are assigned or transferred into the FLP for ownership, management and control. In most FLP's, the parents are the general partners with a 1% interest, while the children and siblings share the remainder as limited partners. Thus the parents' exposure to risk of loss of property held by the FLP is greatly reduced. Even if a charging order is obtained by a creditor, the partnership can limit distributions (for legitimate purposes) to reduce exposure.


Just one layer of a multi-layered approach to asset protection. And yes you can go in and out of the FLP.

 

[Lee Lansford]

Mike, if you get sued...and the other party wins and receives a judgment against you...you better never, ever own anything.

Lee

 

[moe cohen]

Asset Protection

Mike
I looked into it several times in the past because of the possible liablity as an appraiser and landlord.
I was reluctant to do it because of the possible complications at tax time.
What has been your experience?
Moe

 

[DTB]

Moe,

It is tax beneficial. I pay about 750 per year for tax services.

Lee,

How is that different from you getting sued, lose everything and still have a deficiency judgement against you? I'm not wiped out, that's the difference.