LLC versus Umbrella insurance for liability

Hi, I own 4 rental properties across CA and FL. They are vested in the name if family trust. If I need to move them into an LLC, I lending banks will not agree to it. I do have Umbrella insurance. What are the pros and cons of handling liability issues if /when they arise through Umbrella insurance?

@inventivebuyer why won’t lending banks agree to you moving the properties into an LLC? Are these lenders that you already have a borrowing relationships with or are these prospective banks that you want to borrow from in the future?

@donyost , These are banks I have already used to borrow for the properties and when i borrowed, properties are vested in the name of my family trust that I am a trustee of. I don’t know what is the process to now work with the bank to change to a LLC.

@inventivebuyer have you asked the bank what the process is supposed to look like? They could probably spell it out for you.

It seems odd that the titled owner (whether it’s a trust, and LLC, or you personally) would matter so much. As long as it’s YOU at the end of the line and you’ve signed all the appropriate documents to give them the security they need, I’m not sure why the structure of the ownership would matter.

If they’re making it impossible for you, you might consider moving all of your business to another bank.

@inventivebuyer Can you leave the trust and you as trustee in place and just change the beneficiary from “family-x” to “Y, LLC”? I’ve created my trusts using Lou Brown’s paperwork and training, which makes this very simple via a revocable 2 layer trust.