In this episode of Coffee with Carl, attorney Carl Zoellner talks about bank account basics for real estate investing and business, including where to set up bank accounts for your LLCs to retain liability protection.
In real estate investing, where’s the best place to set up a bank account for your LLC or other entity?
The gold standard is having a bank account with a routing number in the same state that your entity conducts business. Thus, if you created an entity in Wyoming, one of the strongest states for asset protection, the gold standard would be to create a Wyoming bank account with a Wyoming routing number, too.
However, having a bank account for your entity is more important than where the account is located these days. With the rise of online banking, WHERE your bank account is located becomes less and less relevant.
You also want to make sure that each entity has a separate bank account. This is an important part of your asset protection strategy. If not, you run the risk of losing everything if only one entity is sued. This is another reason why it’s more important to HAVE a bank account for each entity than where it’s located.
Overall, creating a bank account for each entity is one of the most important parts of proving your entities are separate and distinct, crucial to maintaining liability protection. Where the bank account is located is much less important — just make sure you have one per entity.
Watch now as Carl covers the basics of banking for your entity. He breaks down the relevancy of bank account location and explains why this is an important part of your big-picture asset protection strategy.
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