Your home and primary residence is probably one of your most important assets. How does this play a role in an asset protection plan? Homes are always seen as valuable and if you cannot satisfy a large judgement, a list of targets is what comes next, what do you have that can be used to satisfy a financial obligation… your home. Here’s how you incorporate your primary residence into an asset protection plan.
Protecting the Family Home
Here we create the first layer of asset protection and that is creating privacy of ownership for your primary residence. This will be a publicly recorded document showing who owns the property (will be in the name of the trust) and there is no public document that says who the beneficiary of the trust is. That is the first element of protection.
Next we make the beneficiary of the Land Trust, your living trust. Here we are affording you the ability to state where your asset goes to upon death. This is where we incorporate Estate Planning into your Asset Protection Plan and you are able to avoid probate expenses and possibly some estate taxes.
Finally we implement a deterrent into the plan. This is how to make your property worthless – have an LLC mortgage the equity. Now you have a privately held piece of real estate that is inside an estate plan and has zero equity (for public records purposes). Litigators use your available assets as tools – the fear of losing your wealth is control. If you have nothing to lose, they have nothing to gain by pursuing you.
There are a number of different ways to protect your assets, including your primary residence. This is an illustration and example for a common direction. Each individual’s strategy will vary depending on their personal situation.