Me To You Tuesday
Your LLC, Your Corporation, Your Trust – AIN’T YOU!
Hello All! Another “Me To You Tuesday” message. I hope you find this helpful.
When a LLC, a Corporation, or a Trust, or some other entity type is created; that entity is given a name and in many cases is assigned a new tax ID number that addresses that entity. Definition of an entity- a thing with distinct and independent existence.
If we assume that an “entity” has its own “independent existence”, it important that we understand that the entities’ assets are the owned by the entity. Right? If the entity owns a home, it is the entity’s home not yours as an individual. The individual may be the sole owner of the LLC, Corporation, or Trust, but that is not translated to mean that the individual that owns entity is the direct owner of the asset.
Home insurance companies insure owners for the assets they own. If a LLC owns a home, the NAMED INSURED needs to be listed as the owner of the insurance policy. Why? Because insurance companies insure the OWNER of the home. Take a quick glance at your insurance policy or give your agent a call. Ask one question, “Who does the Insurance Company believe owns my home?” If your home is in an entity name other than YOU, the answer could be critical to the claim process and a potential denial of coverage. Why? Insurance companies insure OWNERS. If the owner is not listed as a NAMED INSURED on the policy, this weakens the claim process and provides opportunity for denial.
A OWNER’s Name listed as an “Additional Insured” may not convey all of the same coverage as the “Named Insured”. If your agent states that the insurance company cannot add the OWNERS name to the policy as a “Named Insured” consider getting a signed statement from your agent. The agent should state that the agent is aware of the true owner’s name and that the “additional insured” status is sufficient to meet the insurance company’s requirements.
When insuring a home, always make sure to insure the home in the name of the owner. If you change the owner due to tax planning strategies, change the named insured in your home policy too!
Another “Me To You Tuesday” update. I hope it was helpful. If you would like a quote for your entity’s assets, Call ME! Paul Locke 912-225-6000 or fill-in the contact information below and be assured that ONLY “ME” will guard your data and your privacy!