LLC vs trust for asset protection

Lane: I'd like you to explain the relationship of an LLC going into a trust in a business situation. Are your assets protected better that they're in the trust or the LLC owns the trust? Can you explain that to me, how that works?

Attorney Tom Olsen: Well, when people talk about trust, they're all talking about the same thing. A revocable living trust. People are using trust for the purpose of avoiding probate. People want to avoid probate because it's expensive and it takes a long time. A trust has nothing to do with protecting your assets from creditor claims. Any creditor that can get your assets without a trust can get your assets with a trust. We're talking about doctors, hospitals, credit cards, automobile accidents. Now people are using LLCs to avoid personal liability.

If you have an Airbnb property, you got people coming and going all the time. A lot of potential liability. That would be one situation where I would insist that you have that Airbnb property, RVRBO property owned by an LLC to protect your personal assets from liability. If you have an LLC and owns a Airbnb property and somebody gets hurt on that property, they would be obligated to sue that LLC.

They could not sue you personally, and all they could do would be go after the asset in that LLC, which is that property. If you have an LLC, we can make your living trust the owner of the shares of that LLC. We would do that simply for the purpose of avoiding probate on that LLC when you pass away. Lane, has that helped you out?

Lane: Yes, I was on YouTube is the worst thing in the world. I was just wondering how you protect all your assets from basically a lawsuit. Is there any way to do that?

Tom Olsen: Lane.

Lane: Somebody can't see where those assets are.

Tom Olsen: The answer is basically no, Lane. Lane here's a bottom line. If you have accumulated wealth property, IRAs, cash in the bank, your best defense is to be well insured. You got lots of insurance on your car, your boat, your houses, your properties, and on top of that all, you have an umbrella policy lane. That's your best defense, Lane, and that's what I was saying-

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