Top three reasons to hold a vacation home in an LLC

If you’re in the market for a vacation home, an LLC could be a smart way to own that property. An LLC, or limited liability company, provides the tax planning and ownership flexibility of a partnership along with the liability protection of a corporation. In most states an LLC can be formed for non-business purposes, including owning a vacation home. Here are the top three reasons to considering holding your vacation property in an LLC: Asset and creditor protection: Let’s say a visitor hurts their neck falling down the front steps of a family vacation home and receives a large settlement from a jury as a result. If you hold your vacation home in an LLC, your family exposure to the settlement would be limited to the investment in the LLC–in other words, the vacation home itself. Your primary residence and other assets, as well as those of your co-owners, would be shielded. Of course, you’ll still need adequate liability insurance to supplement the protection offered by the LLC. Property management: If you own a vacation property with other family members, setting up an LLC will allow you to set some terms. Things like deciding who is allowed to use