As high net worth individuals embrace the tax and asset protection benefits of placing private property ownership in the name of a trust or LLC, critical insurance coverage issues arise. Few trusted advisors or property owners are aware that the “named insured” insurance contract provisions prohibit the extension of coverage to protect the interests of the real property owner – the trust or LLC – in the event of a covered loss.
When Transferring Real Property to a Trust or LLC
May 13, 2008 by privateriskadvisor
The resulting coverage void can remain undetected for years, only becoming apparent after a loss for which the application of coverage has been invalidated. Depending upon their role in the creation and administration of the trust or LLC, some advisors may even discover they have a professional liability exposure in the event of an uncovered loss.
Click here to access an article from The CPA Journal that explains this problem and the solutions that can be made available.