Mark Kohler explains why many LLCs don't actually protect your personal assets. Most people skip signing paperwork, skip the operating agreement, and don't realize their LLC is legally defective until a lawsuit or audit exposes it. A lawsuit or death often reveals the LLC won't hold up in court.
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There's a real chance the LLC you're counting on right now is broken and you won't find out until the exact moment you really need it to work for you. A lawsuit, an audit, a partner falling out, death in the family. Here's what scares me. It won't look broken. You've got the articles that you filed when you formed the LLC. You maybe paid a service a few hundred bucks and got a nice PDF back that you never signed and you've got a book collecting dust in the corner. You feel protected, but having an LLC and having one that actually holds up are two completely different things. And I've had people sit across from me thinking they're okay they're okay and they're covered. And I have to break them the bad news that the LLC they actually thought was protecting their house and investments has a hole in it.