Seasoned real estate investors know how important it is to protect their real estate assets. Finding a solid investment take time, effort and no shortage of talent but left exposed to third party forces all that effort could be lost in the event of a lawsuit. Insuring your real estate is one thing but shieldingprotect your assets sooner rather than later your holdings from litigation is quite another.

Regardless if you have just one property or one hundred, make sure you form a proper business entity to hold your real estate investments.

There are a few different types of entities from which to choose ranging from corporation to a trust and there are advantages to each. Today, most real estate is held in a Limited Liability Corporation (LLC), Limited Liability Partnership (LLP) or a Trust. A corporation is always an option but for most real estate investors, the costs and maintenance of a corporation compared to an LLC or Trust makes a corporation a secondary choice.

When deciding which is best for you, you should seek legal counsel and discuss these options and align them with your goals. But whatever entity you choose, you need to form it now before you truly need it. Face it; we live in a litigious society. Someone slips and falls on one of your properties and you could find yourself on the wrong side of a lawsuit. Yes, insurance is the first line of defense but for extended claims; litigants can choose to go after your personal assets. You can avoid this by transferring your property into a protective entity.

However, if you decide to form a Trust after you’ve already received a summons to appear in court, it’s probably too late. Yes, during discovery an attorney might have a more difficult time itemizing your real estate assets but not only will they ultimately be discovered a judge will disallow the transfer as your assets weren’t in an LLC or Trust at the time of the incident. Don’t wait until it’s too late. Do your research, talk to your attorney and begin transferring your real estate assets to a safe, secure environment.