How can I reduce my personal exposure from managing the properties in my LLCs?

Property owners are smart to consider this point. While they have no personal liability for the contracts and debts of the LLC; they can nevertheless be personally sued, together with the LLC, for their personal acts of negligence in managing the LLC – or any other entity for that matter.

Real estate, particularly investment and rental properties, creates enormous liabilities ranging from breach of lease, to 'slip and fall', to environmental and toxic waste claims. This is a major reason to title your commercial properties to an LLC, as the manager generally has no personal responsibility for the debts of the LLC. Nevertheless, the LLC should carry adequate liability insurance. Many of our clients form another LLC or corporation to manage the LLC that owns their property. This further distances them from potential personal liability as property managers.

In sum, you want to shield yourself from both 'outside-in' and 'inside-out' liability. 'Outside-in' means that your ownership of the property cannot be claimed by your personal creditors. 'Inside-out' insulates you and your personal assets from liabilities arising from your owning or managing the property.