Levels of Asset Protection



AP Level 1: Basic Asset Protection for Investors (the Texas Series LLC)

  1. form a series LLC to own and manage investment properties and businesses in separate series, establishing insulation and multiple liability barriers;
  2. file an assumed name certificate (DBA) for this company and utilize the DBA in business dealings, contracts, leases, etc.;
  3. establish a checking account for the company under its DBA and have checks, letterhead, cards, etc. printed that way and phone numbers listed that way;
  4. transfer properties held in personal names into individual series of the holding company (Series A, Series B, etc.) using deeds that cite series protections;
  5. separate homestead and other creditor-exempt items from investments and businesses, then reduce debt on these items in order to maximize protections afforded by the Property Code and Texas Constitution; and
  6. form a living trust for the homestead to avoid probate, transfer the home into it, and then execute a pour-over will to transfer other assets to the trust upon death.


AP Level 2: Two-Company Structure (the “Texas Two-Step”)

  1. establish a Texas series LLC or Nevada series LLC to own and hold—but not manage—investment properties and businesses (a holding company, which has no privity with anyone);
  2. form a separate, stand-alone Texas LLC (no cross ownership) to act as a shell management company to acquire properties and then after closing transfer them to the holding company; meanwhile the management company signs leases and contracts and deals with tenants, vendors, contractors, and the public; income passes through to the holding company as consulting fees and returns to the management company, if needed, as management fees;
  3. file assumed name certificates (DBAs) for both the holding company and for the management company and utilize these names in all dealings;
  4. establish checking accounts for each company under their respective DBAs and have checks, letterhead, cards, etc. printed that way, and phone numbers listed that way;
  5. transfer properties held in personal names into individual series of the holding company (Series A, Series B, etc.) using deeds that cite series protections;
  6. separate homestead and other creditor-exempt items from investments and businesses, then reduce debt on these items in order to maximize protections afforded by the Property Code and Texas Constitution;
  7. form a living trust for the homestead to avoid probate, transfer the home into it, and then execute a pour-over will to transfer other assets to the trust upon death.


AP Level 3: Texas-Nevada Combination (the “Two-State Solution”)

  1. establish a Nevada series LLC to own and hold, but not manage, investment properties and businesses (a holding company) achieving a measure of physical and legal distance plus anonymity from Texas plaintiffs;
  2. form a separate stand-alone Texas LLC (no cross ownership) to act as a shell management company (no significant assets) to acquire properties and then after closing transfer them to the holding company; meanwhile the management company signs leases and contracts and deals with tenants, vendors, contractors, and the public; income passes through to the holding company as consulting fees and returns to the management company, if needed, as management fees;
  3. file assumed name certificates (DBAs) for both the holding company and for the management company and utilize these names in all dealings;
  4. establish checking accounts for each company under their respective DBAs and have checks, letterhead, cards, etc. printed that way, and phone numbers listed that way;
  5. transfer properties held in personal names into individual series of the Nevada holding company (Series A, Series B, etc.) using deeds that cite series protections;
  6. separate homestead and other creditor-exempt items from investments and businesses, then reduce debt on these items in order to maximize protections afforded by the Property Code and Texas Constitution;
  7. form a living trust for the homestead to avoid probate, transfer the home into it, and then execute a pour-over will to transfer other assets to the trust upon death.


AP Level 4: Texas-Nevada Combination (“Hub-Sub”) for Multiple Enterprises

  1. Establish a Nevada or Texas series LLC (the hub company);
  2. form a Texas LLC (series or traditional) for one enterprise, designating Series A of the Nevada company as sole member and manager;
  3. form another Texas LLC (series or traditional) for a second enterprise, designating Series B of the hub company as sole member and manager; and so on,
  4. the result is that separate businesses insulated from one another and protected by a double liability firewall.