How to Protect Your Family Through Estate Planning and Wealth Preservation
Anyone who listens to the podcast knows that planning for the end is always on Chris’s mind, and every year one of his goals is to get better organized. He recently met with attorney Pam Maass who specializes in estate planning and asset protection. She walked us through the basics that anyone who invests in real estate should learn more about. We’ve highlighted a few of the topics in the show notes, but tune in to the podcast to learn about more advanced options.

Anyone who listens to the podcast knows that planning for the end is always on my mind, and every year one of my goals is to get better organized.  I recently met with attorney Pam Maass, who specializes in estate planning and asset protection.  I was so impressed with her knowledge and ability to educate that I asked her to join me on the show to talk more about it. 

She walked us through the basics that anyone who invests in real estate should learn more about.  I’ve highlighted a few of the topics here, but tune in to the podcast to learn about more advanced options.  As a reminder, the information Pam is sharing is informational only and she is not advising against paying taxes.

Pam Maass and Chris Lopez on the Denver Real Estate Investing podcast
Three Learning Options!
  1. Listen to the podcast “#313: How to Protect Your Family Through Estate Planning and Wealth Preservation” on the Denver Real Estate Investing Podcast
  2. Watch the YouTube video (at the bottom).
  3. Read the blog post. Note, the blog is an executive summary. Get the in-depth breakdown from the podcast or video.

I have insurance. Is that enough?

One of the biggest areas where people get into trouble is having insurance but not understanding what’s covered.  It’s important to work with a trusted insurance advisor; take time to meet with them and make sure they understand your business and specific risks.  It’s important to know what things are excluded in a policy, what the policy limits are, and making sure the policy hasn’t lapsed.  

Real estate owners should know that there are two types of liability — inside and outside.  Inside liability is the risk related to the asset itself, such as someone getting hurt on your property.  Outside liability doesn’t have to do with the asset itself, but how it could be affected.  For example, if you are involved in a car accident for which you are at fault, the injured party could come after your real estate if you’re underinsured.

Med Pay is easy to get added to property insurance and will cover people injured on your property.  You can even cover an injury to yourself incurred on the property.  A lot of people get hurt with slips and falls in Colorado because of snow, so making sure you’re covered will protect you against liability and nuisance claims.  

 A lot of times people focus too much on trying to find a good bargain when it comes to insurance, but it’s usually inexpensive to insure upfront for the things you need.  Asset protection can feel like overkill until you actually need it.  Once you need it, anything you try to transfer after the fact could be considered a fraudulent transfer, an illegal action.  Remember, spending hundreds of dollars now could save you millions later.  

What do I need to know about estate planning, and how do I get started?

Estate planning is a plan for life, not death.  Most people think you only need this plan if you’re really old or really wealthy.  In reality, estate planning is not about the amount of money you have but how much input you want over what happens to it.  Assuming your spouse will get all of your assets can leave them and your family in a lurch if you die, or both you and your spouse die without a plan in place.  

The state’s default plan is probate, which involves going to court and costs a considerable amount.  Without an estate plan, your assets go through probate court before they can be transferred into anyone else’s name.  Before that transfer can occur, the assets must be entered into public record and creditors notified, a process which can take anywhere from nine months to two years.  Families have lost assets in process because they have been unable to pay the mortgage on properties in the meantime.  If you own property in more than one state, your estate has to go through probate in both states before being transferred to your family.  

Ensuring your property is titled correctly is also crucial, as it cannot be fixed after you pass away.  Incorrectly titled property can result in your heirs having to pay capital gains taxes or losing the property entirely.  A joint tenancy with right of survivorship will ensure that property immediately goes to the joint owner if one person dies, but the downside is that there will eventually be probate and capitals gains taxes upon the death of the second owner.  Putting your property into a Limited Liability Company (LLC) and assigning it to a living trust lets you avoid probate, ensures the right people inherit the property, and protects your heirs down the road.  

The easiest way to get started with estate planning is to take inventory of what you have.  One of the biggest risks to your family is not knowing where all of your accounts, investments, and documents are should something happen to you.  You can take a sheet of paper, write down your assets and how to access them, and make sure the people you care about know where that list is located.  The state of Colorado has more than $500M in unclaimed assets because families don’t know what assets they have.  Taking the time to have everyone in one place will ensure your family gets what they deserve.  

Why should I put my real estate properties in an LLC?

LLCs are perfect for holding real estate because they can be owned by a single member and require less maintenance than a corporation.  They’re far easier to manage, though they require work to ensure they are completely independent of you personally.  An LLC is a separate taxpayer with its own tax ID and requires a separate bank account to ensure that you and the LLC don’t co-mingle in any way.  A lot of people go on Legal Zoom and quickly set up an LLC but don’t understand the right way to do it.  If your personal and business assets aren’t entirely separate, someone coming after your business could go after your personal assets as well.  

A common question people ask when it comes to LLCs and real estate is how to correctly transfer the real estate from their name into an LLC.  To get the best loan, it’s often necessary to take out a mortgage in your personal name, but you’ll eventually want to transfer the property to your LLC.  The best way to avoid any legal issues or triggering a due-on-sale clause is to talk to your mortgage lender about your plan from the beginning.  Different companies have different standards and you want to make sure you follow their procedures correctly .  

Should I put my property in separate LLC?

A risk for property owners is someone getting hurt on one of their properties and going after all of their properties if the properties are all under one LLC.  A lot of people who own real estate also own related businesses that use tractors, earth moving vehicles, or other equipment that can be dangerous or cause an accident.  It’s a good idea to put those things in their own entity that’s separate from the real estate.  

A common structure for grouping together multiple LLCs is to have a master holding LLC that doesn’t directly own real estate but owns the LLCs below it.  You’ll want to do your own cost benefit analysis for this type of structure since every separate LLC requires its own filing fees and tax returns.  It’s best to talk to an accountant about specific laws in your state and the best way to set up these LLCs.  

How much protection do I need?

It’s important to understand what assets are automatically protected and which ones aren’t.  Colorado has a Homestead Exemption which protects your home up to $75K if you’re single and double that if you’re married.  Life insurance, annuities, and IRAs are also protected in this state.  Unprotected assets include real estate solely in your name or owned jointly with your spouse.  

Clients should meet with their lawyers to understand what their protected assets are, where their money is, and how to safely and cheaply store it.  Look at what you actually have, understand your goals and risks, and make sure you have the right insurance.  That will give you a holistic look at your portfolio and give you guidance of how much protection you need.  

Asset protection is really wealth preservation—how you can set things up correctly to protect you and your family.  It’s important to understand that the goal of this isn’t to do something shady or fraudulent but to have everything organized and legally in order.  

Connect with Pam

Pam knows that a lot of people have had unpleasant experiences with lawyers, so she structures her services differently.  Instead of charging fees and treating clients transactionally, she offers a flat fee and focuses on building relationships.  Her estate planning service is an eight-week process that includes an initial planning session, signing ceremony, and final meeting, all of which are offered virtually or in-person.  The fees range between $4-6K for traditional estate planning, which may be more expensive if advanced planning is required.  

For listeners of the show she offers a Golden Ticket: $1K towards services, which includes a complimentary planning session (normally $750) in which she either does an audit of your existing plan or does a full inventory of your assets and makes recommendations.  She requires that some homework be completed on your end to ensure that you are both invested in the planning process.  There’s no pressure to work with her after the session, but if you do, she will take $250 off the plan.  

If you want to take advantage of her offer, go to  A credit card is required to secure an appointment but isn’t charged unless you miss the meeting or don’t cancel within 48 hours.  If you can’t find an appointment, call the office and they can work with you.  She also offers estate planning closing gifts for those in the real estate business.  

We all know that the end will come eventually, and making sure you have everything settled ahead of time is crucial.  Set aside some time to make a plan and make sure your family knows how to access it.

YouTube Video

How to Protect Your Family through Estate Planning and Wealth Preservation

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Chris Lopez
Chris Lopez is a Denver area real estate entrepreneur and investor, as well as the host of Bigger Pockets’ House Hackerz and the Denver Real Estate Investing Podcast.
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