This is a split off from another thread as I think it warrants its own. There are some circumstances that warrant your own name. But I see so much of what happens when things go bad that those would have to be pretty limited circumstances in my mind.
I have always been a fan of structures for buying property in. Admittedly my first 8 were bought in personal names because I did not know any better.
Dealing with bankruptcy, liquidation, administration etc you see the benefits of structures for people who have business and/or some other risk.
Doing civil litigation, ie suing people for money, I see people who you would never imagine in a million years would be at risk of losing their assets, who get into trouble.
I have thought long and hard about posting anything at all, but the more emotional conversations I am having with people who have a chance of losing everything, the more I feel the need to warn others. This is not a way to promote structures or bring in clients for me or for any of the others on here, this is merely the result of dealing with so many difficult situations that are made so much worse by having a poor structure. It still sucks to have an issue come up, but it is way better losing part of your assets than all of them.
I have a matter that I can not talk about the details of yet, but I will when it is safe to do so. If you are one of my clients in that matter please do not talk about it at all here either. It needs to stay confidential to help your case. If you are not involved but think you know the details of the case for some other reason please do not post theories here etc. MODERATORS will immediately be asked to delete any such information.
When I am able to I will explain it in detail but without identifying any parties etc.
There are dozens and dozens of people affected, most with an extremely low risk profile and they have done nothing out of the ordinary or what anyone would consider risky here. All bar one of them has not insulated their own house through appropriate structures and financing.
If you use an appropriate structure (both asset and financing) and something goes wrong personally and you lose your house, the entity keeps the investment property. Same as if something goes wrong with the investment property, that entity and it may be lost, which still sucks, but at least you keep your house.
I consider buying an investment property in your own name as risky, if not more so than not insuring the property. If you also have a house in your own name I consider it as risky, if not more so, then not insuring both the houses. If you don't have house insurance and the house burns down at least you still have the land (assuming you can afford the repayments).
I have no statistics to back it up, but my assumption is that more people will have an issue either themselves or with their investment property then will have one of the houses burn down. And the correct structure is way cheaper than building insurance.
See a solicitor who knows what they are doing, there are several on this forum, there are plenty more out there who may not be property lawyers but who still know a lot about asset protection. Unfortunately there are plenty who do not either.
Then, as important as the lawyer, see a mortgage broker who knows what they are doing. Having the best structure in the world and then financing it wrong makes the structure pointless. The bank always gets their money first, thats the whole point of the mortgage. Again there are great brokers on this forum, there are more great ones out there. Unfortunately, there are many who know 2/3rds of stuff all. Also if you don't use a bank, the person at the bank who looks after you, no matter how good they are, can not be as independent as a mortgage broker.
Finally, make sure you use a good accountant to keep a check on the way it runs. Do the wrong thing and you run the risk of the structure being considered your alter ego (less likely with a good setup in the first place) and the court will treat the assets as yours.
I have always been a fan of structures for buying property in. Admittedly my first 8 were bought in personal names because I did not know any better.
Dealing with bankruptcy, liquidation, administration etc you see the benefits of structures for people who have business and/or some other risk.
Doing civil litigation, ie suing people for money, I see people who you would never imagine in a million years would be at risk of losing their assets, who get into trouble.
I have thought long and hard about posting anything at all, but the more emotional conversations I am having with people who have a chance of losing everything, the more I feel the need to warn others. This is not a way to promote structures or bring in clients for me or for any of the others on here, this is merely the result of dealing with so many difficult situations that are made so much worse by having a poor structure. It still sucks to have an issue come up, but it is way better losing part of your assets than all of them.
I have a matter that I can not talk about the details of yet, but I will when it is safe to do so. If you are one of my clients in that matter please do not talk about it at all here either. It needs to stay confidential to help your case. If you are not involved but think you know the details of the case for some other reason please do not post theories here etc. MODERATORS will immediately be asked to delete any such information.
When I am able to I will explain it in detail but without identifying any parties etc.
There are dozens and dozens of people affected, most with an extremely low risk profile and they have done nothing out of the ordinary or what anyone would consider risky here. All bar one of them has not insulated their own house through appropriate structures and financing.
If you use an appropriate structure (both asset and financing) and something goes wrong personally and you lose your house, the entity keeps the investment property. Same as if something goes wrong with the investment property, that entity and it may be lost, which still sucks, but at least you keep your house.
I consider buying an investment property in your own name as risky, if not more so than not insuring the property. If you also have a house in your own name I consider it as risky, if not more so, then not insuring both the houses. If you don't have house insurance and the house burns down at least you still have the land (assuming you can afford the repayments).
I have no statistics to back it up, but my assumption is that more people will have an issue either themselves or with their investment property then will have one of the houses burn down. And the correct structure is way cheaper than building insurance.
See a solicitor who knows what they are doing, there are several on this forum, there are plenty more out there who may not be property lawyers but who still know a lot about asset protection. Unfortunately there are plenty who do not either.
Then, as important as the lawyer, see a mortgage broker who knows what they are doing. Having the best structure in the world and then financing it wrong makes the structure pointless. The bank always gets their money first, thats the whole point of the mortgage. Again there are great brokers on this forum, there are more great ones out there. Unfortunately, there are many who know 2/3rds of stuff all. Also if you don't use a bank, the person at the bank who looks after you, no matter how good they are, can not be as independent as a mortgage broker.
Finally, make sure you use a good accountant to keep a check on the way it runs. Do the wrong thing and you run the risk of the structure being considered your alter ego (less likely with a good setup in the first place) and the court will treat the assets as yours.
