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Video instructions and help with filling out and completing Are Form 5495 Liability

Instructions and Help about Are Form 5495 Liability

Larry is with us in Rapid City South Dakota hi Larry how are you I'm doing fine David thanks for taking my call it says X ray employ Road sure what's up the other day I was developing and all our insurance and most of my insurance I kind of figured it out as far as levels and stuff like that but I'm kind of struggling on what to do with our personal liability insurance because we got that million-dollar policy way back when when when we were I would say knee deep or neck deep in debt because my wife's a doc and now I just kind of kind of looked at our balance sheet so to speak and much to my surprise I discovered where a millionaire and I'm just kind of wondering if if we're under covered liability our policy is 1 million most are in retirement investments is like 1.2 our real estate is just to save under a million because we have a couple different properties one of them this kind of a kind of a rental I mean it we rent it because it's like our second home that it's kind of a vacation program but it's you know it's not official rental property as such I'm not talking about talking about a little bit but let me interrupt you not talking about her being a doc and not talking about any kind of liability about that but just general liability meaning like a car insurance and homeowners insurance and rental property insurance and so forth a liability umbrella policy is probably what you have that's the extra million that you've got you know right you know do you do have enough net worth and she does have doc after her name those two things put a target on your but if somebody slips and falls on a rental property and they're gone they're gone I got go I think they're killed myself over here you know and you know you have to go through all that crap so yeah is the rental properties are they their personal use some and some sound like a resort property rented some and live ISM yeah we always say we probably use it a couple months out of the year but it's not our rental okay so in and then like when we're not there we'll take advantage of the summertime and and rent it you know I think we have the right approach on that the only question I've got about that is is that you may want to slip that into an LLC if you haven't and so it's standalone and if something happened on that property that LLC if it's properly documented and you run the business as an LLC then if something happened in that property alone then that's the most they could sue you for is that and so that's a little bit of risk management I don't put more than five million dollars for the real estate in one LLC like if I've got you know five six seven houses or something I get I get it that's one LLC and then I'll start another one so that's the most they could get after if they wanted to come after that the building I'm sitting in is worth about probably 15 or 20 million something like that it's it's own separate LLC so if I've got a big piece of real estate I have a separate LLC for each of those and so that limits the size of the target from being the whole portfolio down to individual things because those LLC's are conducted properly they're standalone businesses and you can only sue for the assets of that business if you are harmed at that location and so that that's a little bit of risk management and then the other thing it sounds like your net worth north of 4 million and so you know you may want to look at bumping that to 5 million that liability umbrella I carry 10 and you can you can go from a million to 5 million I don't remember what that cost a million is usually about two hundred a year it'll probably be probably three times that probably less than thousand dollars a year for for a five million dollar and you know it's just inexpensive insurance and you work so hard and so many hours and so much diligence to build up this ass that base that you don't want one singular catastrophic event to destroy the whole thing and that's what the liability policy is it's the it's the cheapest of all insurance it's the best buy and all kinds of insurance is the best buy I mean just I mean you can't give five million of anything for that kind of money you know in anything else so you know price it with your insurance broker and let them shop around there's a lot of people sell a million dollars and there's a few that sell five intense you want to get over ten it starts getting a little hairy but I just do other things for risk management in addition to the ten so you know try to set your properties apart and separate things to make the target smaller if someone decide they want to be let it just one to litigate on you and and carry your liability insurance so yeah I find me I'm going to shop that and you look at it and based on the price you get quoted if you think it's worth that to transfer that risk it probably is hey you guys Rachael Cruz here hope you are enjoying the Dave Ramsey show and did you know that I have my very own YouTube channel yes that's right kind of better than that I'm kidding I'm kidding so subscribe and there's lots of videos about life and money so.

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