If you’re considering forming a LLC to own your real estate assets, you may be wondering what state offers the best benefits. When it comes to asset protection, Wyoming is hard to beat. Let’s take a look at some of the reasons why a Wyoming LLC might be the best option for you.
Wyoming LLCs Offer Superior Asset Protection
If your assets are held in a Wyoming LLC, creditors are limited to only a charging order. This gives you charging order protection, which protects you from creditors attaching your assets or any ownership interest in your LLC. In other words, if you form a Wyoming LLC and someone sues you, they can only take over your payments (if any) to the LLC. They cannot take control of the LLC itself or any of its assets.
What is a Charging Order?
A charging order is an order from a court that allows a creditor to collect distributions that would otherwise go to the debtor-member from an LLC. In other words, if you have a WY LLC and you default on a debt, your creditor can get an order from the court requiring the LLC to pay them any distributions that would otherwise go to you. However, the creditor does not become a member of the LLC and they cannot control the management of the company, therefore the creditor cannot for you, as LLC manager, to do an annual distribution.
Wyoming Privacy Laws Are Among the Best in the Nation
Another important benefit of forming a Wyoming LLC is that Wyoming’s privacy laws are some of the best in the nation. When you form a Wyoming LLC, only the registered agent’s name and contact information need to be listed on public records. The names of your members (i.e., the owners of your LLC) do not have to be disclosed. This is not the case in most other states.
Low Cost of Formation and Maintenance
Compared to other states, the cost of formation and maintenance for a Wyoming LLC is very low. The initial filing fee for a Wyoming LLC is just $100, and there is no franchise tax required. This makes it very affordable to maintain a Wyoming LLC over the long term.
As you can see, there are many compelling reasons to form a Wyoming LLC for your real estate assets. If you are looking for the best asset protection, charging order protection, and privacy protection available, then formation in Wyoming is clearly the way to go. Additionally, the low cost of formation and maintenance makes it an attractive option from a financial standpoint as well. It’s safe to say that forming a WY LLC is one of smartest decisions you can make when it comes to protecting your real estate assets.