Hello and welcome to Passive Real Estate Investing. I'm your host, Marco Santarelli. You know, when it comes to real estate, ownership of real estate has many benefits from an investment and a tax perspective. But of course, there is downside risk. However, since the value of real estate holdings can be used to cover damages awarded in a lawsuit, should you be in a situation where you have a lawsuit, it's important to consider asset protection and asset protection strategies relating to real estate holdings in order to minimize the risk of a lawsuit or the claim in a lawsuit. So asset protection planning is a way to reduce exposure to future lawsuit risk. It encompasses insurance and how real estate is titled to make it, and other assets that you own less vulnerable to claims of individuals who may sue you at any point in the future. Basically, it's about preemptive planning.

So the first place to start is with the property itself. Since real estate investors are easy to identify, easy to sue, it appears that we have deep pockets. That means that being adequately insured is a necessity. You want to have the right amount of insurance and the right level of insurance across all your assets. Then the second step involves the proper structure in which you hold your real estate for investment properties. That is highly unusual for us to hold them as owners in our personal name. You just don't want your name attached to the assets you should really own nothing, control everything, but own nothing. So, holding property in one's personal name or jointly with a spouse places those personal assets and other investment properties at risk. If a lawsuit results in damages. So if there's a lawsuit and there's a claim that's awarded, they're gonna come after you.

But if you don't own anything, if there's nothing to go after, you essentially look broke, then there's nothing to claim. You know, you're basically trying to get blood from a stone. That's why you want to control everything but not own anything. So using the right tools mitigates your exposure, your risk, and your liability. So on today's episode, we're gonna learn more about property and property protection and how to properly protect ourselves from potential claims in a lawsuit in the future.

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Well, it's my honor to welcome Scott Smith back to the show. Scott is the owner of Royal Legal Solutions based in Austin, Texas. He's one of the top asset protection companies in the country, especially for real estate investors. He provides niche advice for over 2000 clients representing all 50 states. He's an entrepreneur himself and he has a real estate investments based all over the country. I don't remember how many states that was. I know at one time was over 10, but he's an avid real estate investor himself. Anyway, Scott, welcome back to the show.

Thanks for having me back, Marco. Great to be here.

It's great to have you back on. It's been a while since we had you on the show. I know we've been talking more recently catching up on things and how you've been expanding your firm. Some of the other services you're now providing as part of the asset protection side of it, which involves some financial services and essentially what you've called a complete package. We can talk a little bit about that towards the end once people have got their mind wrapped around asset protection, what it is, why they need it, why it's so important and whatnot. But before we dive into all that, let's take a minute and talk about you. Tell us a little bit more about yourself and how you got involved in real estate investing as well as asset protection specifically.

Yeah, so I actually grew up in Houston, Texas. Like probably like many of the people out there, like, you know,