As a Maryland property owner, you have worked hard to build up your assets to live a life of quality and comfort. If you also rely on rental properties as a source of income, it’s important to take the proper steps to ensure that your venture is as protected as it is equitable. The modern American Dream revolves around the power that real estate can provide motivated individuals. If you utilize property for income in Maryland, it’s important to find experts such as our Bethesda estate lawyers for assistance. JDKatz is comprised of experienced individuals who specialize in a range of practices, from family law to tax fraud and more. Our estate planning attorneys are here to create customized strategies for each client to deliver the most security and cost-effectiveness for estates of all sizes.
While complex, estate law does afford certain protections to individuals who plan ahead and prepare for future scenarios. Today, we’ll look at a few measures that can prove beneficial if you’re a property renter without an effective estate plan.
Estate Planning for Comprehensive Coverage
For those who do not know, estate planning is the process of planning for the entirety of your estate, including assets and obligations for both beneficiaries and creditors. This modern approach is more complex than ever, making it important for you to do your research and put in the effort to find a professional that can help protect you from legal recourse.
For many landlords, this problem arises when tenants or their guests seek compensation for an injury sustained on your property. The legalities surrounding who is at fault are complex, relying on numerous factors to establish landlord responsibility. Another dispute that frequently arises in leasing situations is a dispute on the lease itself. From payment windows to pet regulations, a wide range of problems can arise from any dispute between the landlord and their tenants.
As a property owner, your first move should be securing adequate insurance to cover the costs of possible injuries. If your insurance policy is not enough to satisfy the payment, your personal assets will be at risk for possession of repayment. Our estate attorneys can help you to find comprehensive coverage that matches your needs and budget to protect from this outcome.
Creating a Business Entity
Another strategy that is effective in limiting your personal liability is to create a business entity that creates space between your company assets and your personal finances. A limited liability company (LLC) is one commonly utilized entity that provides protection to owners. You can expect numerous benefits from your LLC, but remember that simply applying for the approval is not enough. You will be expected to complete all forms and upkeep in a timely and professional manner, treating your business entity as an actual establishment. Failure to do so can result in serious complications down the road!
Another way to keep your investment properties protected is to put them in a living trust. Ownership in your LLC is recognized as an asset and can therefore be controlled by your trust.
Appointing a Trustee
You will be charged with entrusting the assets of your rental property (or properties) to an individual to manage. In many cases, your living trust can be the sole member of an LLC, giving you full control over operations and maintenance. Property owners with multiple ventures or properties across state lines may benefit from appointing a trustee to oversee the property care. You can plan for the level of control you want your trustee to have. For example, your trustee can be tasked with collecting rents from tenants to keep all assets focused on the property, or you can utilize those funds for different ventures. If you have a trusted business partner or you know an investment pro, the trust can be used for proper fund dispersals.
Maximizing Tax Advantages
Landlords can face a complex array of tax liabilities due to the income from their investment properties. Our estate planning attorneys can help you to develop a sound strategy for making the most of your assets while minimizing tax liabilities. Remember that living trusts and business entities are governed by strict rules, and not adhering to every code can result in legal punishment. It can prove entirely beneficial to work with an estate professional to make the most of your investments. You’ve worked hard to get this far, now our Maryland estate lawyers are here to help take your assets further while protecting what you’ve earned.
JDKatz is here to serve as your comprehensive source for estate planning in Bethesda and D.C., delivering personalized support for estates of all sizes. If you’re a landlord, it’s important to take the proper steps to keep your assets protected for both the present and the future. Contact us today to see how we can help.