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TexLaw, Attorney
Category: Business Law
Satisfied Customers: 4430
Experience:  Internationational Commercial Attorney
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I am interested in forming an LLC and transferring all my property

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I am interested in forming an LLC and transferring all my property deeds to this LLC.If I start a business that is not tied to this LLC will my properties be protected if my business goes under? I've been married for almost seven months. I have owned my properties for over a decade. In case of divorce will the LLC protect my properties?

Thank you for your question.

What you are envisioning as the function of an LLC is not exactly correct.

The property which is held by the LLC will be subject to the liabilities of the LLC. If you transfer your property to the LLC and then the business of the LLC goes under, your properties will go under with it. The purpose of starting the LLC is to protect your personal property from the business liability. You want to make sure that your personal property and real estate is held separately from your business.

Further, transferring property that was acquired during a marriage to an LLC does not protect the property from a divorce. If you want to protect the property from a divorce, you need to get your spouse's agreement that the property is separate property and will not be subject to division in a divorce. This is called a post-nuptial agreement if you are already married.

Please let me know if you have any further questions. Please also kindly consider rating my answer positively so that I am compensated by the website for my work on your question. Rating positively does not cause an additional charge and does not prevent us from further discussing your questions.

Best Regards,
Customer: replied 3 years ago.

Thank you but I don't think you read my question correctly.


My properties would be in one LLC and my potential business would be in another. if my business goes under are my properties protected?


I have owned my properties for a decade or more. I have only been married for 7 months. In case of divorce would my properties be protected by the LLC?



Got it! I didn't read it correctly.

IN the first case, yes. Your property in the separate LLC would be protected from business liabilities in the business LLC.

In regard to your question regarding divorce, the answer is that this would not protect your assets. In fact, it might endanger them. Your wife has a community interest in property which is acquired during the marriage. If you transfer the property to an LLC which you start now, then you are acquiring an LLC membership interest during the marriage in which she will have a membership interest (the value of which is set by the property you are transferring into the LLC).

The only way to solidly protect the property from divorce is to get her to agree directly that she has no interest in the property.
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