Choosing the Best Legal Structure for Your Assisted Living
Mar 05, 2025
Starting an assisted living business is exciting, but before you welcome your first resident, you need to protect yourself legally. Choosing the right business structure is one of the most important steps to keeping your assets safe and your business running smoothly.
Should you go with an LLC? An S Corp? A two-entity setup? Let’s break it down in simple terms!
Quick note: I am not an attorney, and this blog or my content should not be taken as legal advice - please talk to a legal professional when it comes to legal matters.
Check out the video, too:
Start with Legal Guidance
Before you file any paperwork, talk to an attorney. It’s tempting to use online services like LegalZoom, but assisted living is a highly regulated industry. The wrong setup could put you at risk of lawsuits or financial losses.
A specialized attorney can help you:
βοΈ Choose the best legal structure
βοΈ File the right paperwork
βοΈ Protect your personal assets
π° Cost: Expect to pay $800 to $2,500 to set up two entities (one for real estate and one for operations). This investment is worth the peace of mind!
Which Business Structure Is Best for Assisted Living?
Here’s a quick guide to common legal structures:
π« Sole Proprietorship (Not Recommended)
β No liability protection
β Your personal assets (house, car, savings) may be at risk
β Not suitable for assisted living businesses
π’ C Corporation (For Large Companies, Not Small Businesses)
βοΈ Strong liability protection
β Double taxation (you pay taxes twice—on business profits and personal income)
β More expensive to set up and maintain
Best for: Large companies, not small residential assisted living businesses
π LLC (Most Popular Option)
βοΈ Protects personal assets from business lawsuits
βοΈ Simple to set up and run
βοΈ Can be owned by one person or multiple partners
Best for: Most assisted living operators
π S Corporation (Similar to an LLC, With Tax Benefits)
βοΈ Same liability protection as an LLC
βοΈ Potential tax savings on self-employment taxes
β Requires more paperwork and tax filings
Best for: Owners with high profits who want tax savings (consult your CPA first!)
Why Many Owners Use a Two-Entity Structure
A two-entity setup is a smart way to maximize protection. Here’s how it works:
π‘ Entity #1: Real Estate LLC (Owns the property)
- Protects the building from lawsuits related to operations
- Leases the property to your operating company
π₯ Entity #2: Operating LLC (Runs the business)
- Handles resident care, staffing, and daily operations
- Keeps financial and legal risks separate from the property
π¨ Why does this matter?
If a resident’s family sues your business, they can’t go after your property because it’s owned by a separate company!
Where to Find a Great Attorney
Hiring the right legal expert can make a huge difference. Here are two top recommendations:
π Clint Coons – A legal expert in assisted living structures. Tons of great content online.
π KKOS Lawyers (Mark J Kohler’s Team) – A law firm that specializes in tax and legal strategies for small businesses. I've used them in the past.
π Pro Tip: Find a local attorney who understands your state’s assisted living regulations.
Final Thoughts
Picking the right business structure isn’t just paperwork—it’s about protecting your business and personal assets.
β
Best option for most owners? An LLC or S Corp with a two-entity structure (one for real estate, one for operations).
β
Step one? Talk to an attorney before setting anything up.
β
Long-term benefit? Peace of mind knowing your business is legally secure!
Thinking about starting your assisted living business? Drop a comment or check out our resources to get started the right way!
Final Thoughts
Ready to take the next step in your assisted living journey? Download our Business Plan Checklist to ensure you have all the elements needed for a successful business plan. This tool will help you outline your business strategy, identify key goals, and prepare for a profitable venture.
Need help figuring out where to start? Join the next Roadmap Challenge and build your launch plan with me.
Show full transcript π
Transcript
00:00:00
hey friend I am Brandon Gustafson I help beginners like you launch their Assisted Living business in the next 12 months excited to have you here on the channel we're going to be talking about how you should set up your Assisted Living business so if you have ever wondered that and need some guidance stick around for today's [Music] video hey friend welcome back to the video before we get started I want to remind you to get over to the website Assisted Living investing. net and grab our free underwriting calculator it's
00:00:29
going to help you understand if you have a profitable business in front of you or not so go check that out and uh yeah get that free resource let's get into the topic for today's video today we're going to be talking about how you should set up your business for assisted living and this is a topic I I hear all the time I see a lot of people that that want to know this information would love to see what I can do to help you out if you have specific structures that you want that you're considering comment
00:00:53
those down below I would love to hear from you are you an LLC escorp Soul propop what do you want to do now I need to also qualify all of this here everything that I'm I'm saying here I'm not an attorney okay so please do not take this as legal or professional advice I highly suggest that you talk to an attorney as you are setting these things up because despite how much it may cost you to use them to get things set up it will be done correctly and will match what you need for your specific situation so take this what I'm
00:01:26
giving you in this video as information but not as as kind of a little bit of guidance but I highly suggest that you go and reach out to an attorney okay so why should you work with an attorney and I kind of hit on this a little bit already the reason why I would suggest that you go and talk to an attorney is they know what they're doing um these businesses they can be very complex there's different structures that you need to have you have real estate involved you have an operational entity
00:01:52
you're dealing with people's lives you're you know it's Healthcare there's just so many complexities to this there's there probably are Partnerships as you're getting into this just a lot that that goes into this and working with an attorney is going to be the best way to set this up correctly you could go on Legal Zoom you could go on one of those resources set it up you know do it all yourself probably cost you a whole lot less but then you know D are you confident that when somebody comes and
00:02:21
you have a resident fall and their family starts to sue you that you have everything in place and and you feel confident that your personal assets are protected um if you feel like you're good then you know that's a personal decision for me I I I get a lot of Peace of Mind in knowing that my entities are set up correctly so that if something were to happen with a resident or staff member something like that everything that I have that's important to me is protected because of the way that we
00:02:51
have spent our time to get things set up the biggest reason why I would do that is to protect yourself it allows you to ensure that it is done correctly all the paperwork's filed at the right spots and everything with the state and and you don't have to worry about it did I do that did I check this box is is everything good there you want to avoid that and working with an attorney is going to allow you to have that confidence that you've done this all correctly the costs that are associated
00:03:15
with working with an attorney each attorney's office is going to have something that's slightly different they have their own rates and things like that you're probably going to pay them a packaged amount for the types of entities that you're going to be setting up often times the very first entity you set up is going to be a little more expensive because I have to gather all the information have to put it all on file and you know personal info and blah blah blah all the things that that go
00:03:39
into that but when you set up a second or a third or something you know three years down the line much of that information is still the same it's not going to take them as long so most attorneys in my experience will give you a bit of a discount on subsequent entities that you set up with them so price-wise you could be looking at you know Legal Zoom couple hundred bucks um but if you go the route of working with an attorney that that specifies in this I mean you could go from a few hundred
00:04:06
dollar to tens of thousands of dollar is is what you could find places that that I have looked at are typically going to be between that like 800 and $2500 range is what you could expect to do um and that could be like for the two entities to set up your structure for your real estate and for your operating entity so kind of gives you an idea of what that might look like it is an expense but but again like we were talking about uh something that I I think is worth the money in getting things set up and
00:04:36
protecting your privacy and and all the things that come with having these entities in place um I do have a couple recommendations for people now if you are an attorney you're watching this or you have worked with another one I would love for you to comment down below which attorney's office you have worked with I want everybody to understand that these are not personal recommendations and your experiences may vary with these different ities like these different companies that you could work with
00:05:02
attorney's offices and things like that don't get mad at somebody for telling you that they had a great experience with somebody and you had a crappy experience that like that those are individual experiences so you know treat everybody kindly now the people that I am aware of that one of them I've worked with and the other one I've watched a lot of their content the one I've watched a lot of content on is Clint Coons if you search like Clint Coons Assisted Living you're going to find a
00:05:25
whole bunch of legal videos specifically about assisted living very helpful resource so highly recommend that you go and check those guys out they seem to know what they're doing have some really good information I have not personally worked with them but have been very impressed by the information that they put out online the other one that I follow is kkos this is who I work with Mark Kohler is kind of the face of kkos and he Mark J ker he has a bunch of stuff he's also a CPA so he does
00:05:55
accounting and and kind of does a little bit of incorporating of those things together um that's who we have worked with our specific attorney his name is Kevin he's awesome he's down in Arizona a really great guy and has helped us out and with a ton of situations and and has helped us through the process so I highly recommend kkos I've had a great experience I can give you a personal recommendation there that uh they know what they're doing um but check out both of those do your research and again if
00:06:21
you have worked with somebody else comment that down below we love to hear your experience working with different attorneys and people can research them themselves so you know share that down now let's talk about some of the different entity types that you might consider as you're getting into assisted living and what that might look like for you there are at its core four types of entities that you could look at I'm going to start with the one that I think doesn't make the most sense especially
00:06:46
for you as a small you know residential style Assisted Living you're you're on your own uh that would be a C Corp those are much more for bigger things you might watch videos and and see that there's benefits of SE Corps and things like that these are questions for attorneys I'm not an attorney but my understanding is a C Corp for the type of business you're trying to do if you're watching this you're in my audience probably doesn't make the most sense for you in this specific scenario
00:07:13
but again talk to an attorney the second one that I also probably would avoid if I'm being honest is a sole proprietorship U like just me going into business with my name and my social security number and and telling people that I'm doing this I would would probably not do that it does not give you the liability protection the having an entity an official entity set up um it doesn't give you that and so I would avoid that um so that that's my advice there again talk to an attorney and
00:07:44
figure out what's best for you in your situation and see what you're comfortable with now the next two I think make a little more sense and these are questions to have with an attorney the one that I would suggest I think it makes the most sense again not an attorney is an LLC so an LLC is a limited liability company it can be a partnership it can be a single individual they are very flexible it allows you to have anonymity it allows you to have protection liability protection in the event that something
00:08:15
happens a resident Falls something happens it allows you to have that added protection which is going to just give you that peace of mind that things are in place you can have llc's in different states um now where to set up an LLC definitely conversation with an attorney my understanding at least from a tax perspective and the way that you want to do this it's going to benefit you to have the LLC in the state where you are operating at um that's going to be the best way to do it otherwise you're going
00:08:42
to have PA through pass through taxes and and things like that again that's a conversation with an with an accountant and what that looks like for you but that is something you should take into consideration llc's the second one is an es Corp so es Corps are um I don't know the best way to describe as probably a step up from an LLC there's a potential tax benefit there for you as well but those are all things that you should talk to an attorney about or not an attorney NE not necessarily an attorney
00:09:13
definitely an accountant to figure out what the tax ramifications are of having these different entity types because it's going to benefit you to understand that and help guide you in which type of entity you should be setting up now I alluded to this a little bit as you're building out your facilities in your business you might consider having two separate entities one for real estate and one for the operating entity again there are multiple reasons why you would do this one is liability protection you
00:09:42
can protect the real estate by having it in its own LLC um from anything that happens with the operational entity you have to treat them as completely separate entities so you can't let the corporate Vel be pierced and and things like that uh go research that on your own time I'm not going to dive really deep into that but getting that set up is probably going to give you some added protection you can put these all in the same thing it just means that if something were to happen at the facility
00:10:10
resident Falls I I use that as an example because it's the easiest one to think of um family comes at you and wants to sue you they can do that inside of the entity that is the operational entity CU that's where the thing happened so if the real estate is also owned inside of that operational entity that allows that person to go after the equity inside of the home and so it's not something that you would want to do talk to an attorney that can explain all these types of scenarios and situations
00:10:39
to you to help you feel confident that you know what you're doing but when it comes to this type of of a business and what you're trying to do with real estate and getting things started with your Assisted Living business you know I think it's a good idea to consider getting those two types of entities for the two different types of of things that you're doing there real estate and op operational entity so in this video we've been talking a lot about just legal structure what that's going to
00:11:06
look like for you how how you should consider doing this we talked about some of the different business types we talked about why you might need to have an entity why you should go the route of doing this and we also talked a little bit about what it looks like to have multiple entities if you found this information to be helpful make sure you like the video subscribe and ring the bell as well so I can help give you some extra guidance we put videos out here on Tuesdays and on Thursdays uh so would
00:11:31
love to help you out there um and the best way to do that is to have you ring that Bell so you get notified when we put the content out here to to help guide you speaking of that I love helping people through the process I I I do coaching and I do it for you not for me I love it's something that I love doing is giving back to the community if you feel like you need some guidance and you're feeling stressed and overwhelmed and you just don't know how to do this you're confused then check out the
00:11:58
application to The Mastermind program takes you less than 5 minutes to fill it out and it's no commitment no like sales call or anything like that I ask you a few questions and then if I can help you out I'm going to send you some emails about the Mastermind program or other things that I have to see if it's a good fit for you right now you can do that by going to Alim mastermind.com application we're going to link that down below so go check that out and would love to hear you hear from you and
00:12:25
see if I can help you out along your investment Journey does residential assisted sound interesting to you but you don't know how to get started at Assisted Living investing. net we're here to help beginners like you launch their Assisted Living business in the next 12 months want to thank you for watching and remember it doesn't take a lot just a little bit just keep going step by step by step I promise you that if you do and you're consistent and persistent you're going to be successful
00:12:47
thanks for watching and have a great day [Music]
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