And when you rent out property, then you're opening a door to be exposed to liability if anything goes wrong on the property. When you own the beach condo or the rental property or the mountain cabin that you rent out, under a limited liability company, under an LLC. Then if something were to happen on the property, and someone was injured, and they sue, that person is going to sue the owner of the property, which is the limited liability company.

                    

They are limited to only being able to recover what the limited liability company owns, which means that they cannot reach around or through the limited liability company to get your other assets. So this protects you from that creditor being able to get more than just what the limited liability company owns. Whenever you own a business, most of the time it is set up in some type of business structure like a corporation or a limited liability company.

                    

Anytime you own a second investment in that business, for example, if you Have to purchase expensive equipment like a doctor's office purchasing, for example, an MRI machine. The MRI machine will be held in a limited liability company which is separate from the limited liability company that owns the doctor's office building, which is separate from the limited liability company that owns the doctor's practice.

                    

And again, the reason for the limited liability companies is to give you limited liability and make sure that the maximum that the creditor could recover are the assets in the limited liability company. However, there's one catch you must have a multi member limited liability company to be able to limit the liability in other words, you always have to have two partners or more in to get this protection for your family's inheritance.