In Florida, a limited liability company is often a popular way to protect investment and commercial real estate property against seizure due to a judgment or debt settlement action.
The primary reason for this is the belief that an LLC limits the ability of a creditor to reach the property or income of the LLC. This can be true if the LLC has more than one owner, but not if there is only a single owner.
On June 24, 2010, The Supreme Court of Florida, in the case of SHAUN OLMSTEAD, et al., Appellants, v. FEDERAL TRADE COMMISSION, concluded that Florida law permits a court to order a judgment debtor to surrender all right, title, and interest in his or her single-member limited liability company (“single member LLC”) to satisfy an outstanding judgment.
What does this mean for the assets of a person’s single-member LLC established under Florida law? At a minimum, it means that if you are the single member of the LLC, the LLC will not be the protective device you may have thought it would be relative to the assets and income that are owned by the LLC, including investment and commercial real estate property.
Protection of a Florida Limited Liability Company with Multiple Owners
What if the Florida LLC of which you are associated has more than one member? Should you be concerned? Will it protect investment and commercial real estate property against judgments and debt settlements?
The short answer is that no one knows until the Florida appellant courts apply the law of the Olmstead case to other fact situations. If you are in the process of establishing a Florida limited liability company or an LLC under any state’s law, a discussion with your attorney concerning the implication of the Olmstead case is a necessity.
If you would like a copy of The Supreme Court’s decision in the Olmstead case, please call me 813-852-6500 or Email Stross Law Firm P.A.
To find out how Stross Law Firm, P.A. can help you form a Florida limited liability company or trust to protect your investment and commercial real estate property against judgments and debt settlements, please visit these pages:
- Commercial Real Estate Property
- Florida Limited Liability Company Formation & Business Law
- Estate Planning
Schedule a Free Consultation regarding your real estate protection needs.