Home Asset Protection
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Securing home asset protection is a priority in an unstable economy. With foreclosures and unemployment in the U.S. running an all time high, property owners are concerned about keeping their homes in the event of lawsuits, tax liens, or judgments. Aside from being faced with bankruptcy, IRS liens, or exorbitant settlements, homeowners should not have to be worried about selling their house to satisfy creditors. But there are legal means of keeping the homestead, even when money, credit, and second mortgages are scarce. One strategy, placing property in a land trust, is a legal proceeding which ensures that homeowners won't be left out in the cold. A land trust puts the title to real property in another person's name, usually a trustee, and frees the homeowner from legal repercussions, such as tax liens or judgments. The owner retains all rights of ownership, including the right to occupy or rent the home, file a homestead exemption, or apply for an installment or home improvement loan. In other words, the benefits of ownership do not change; but home asset protection safeguards property and possessions.
We live in a society where anyone is subject to be sued at any time and for any reason, especially entrepreneurs. While individuals and business owners can expect to battle lawsuits at least once in a lifetime, there is no reason why personal property should be lost in the process. Individuals may spend years accumulating possessions or building a family home, only to have the courts foreclose or repossess a lifetime of memories, which can never be replaced. In the case of court-ordered judgments against a defendant, the authorities may be given the right to enter a home and seize contents as restitution for unpaid accounts. The local sheriff meets the creditor at the debtor's home and begins to go through room by room, allowing creditors to take whatever they deem necessary to satisfy the judgment. Furnishings, computers, electronics, or vehicles --whatever items total the amount of money owed are immediately forfeited. While filing a homestead exemption prior to a judgment being rendered prevents authorities from taking certain personal items and real property; home asset protection via a land trust, family partnership, or by transferring title are some of the most affordable and effective ways to protect property. And these legal means are not just for the rich and famous.
Wealthy property owners and entrepreneurs have long utilized systems for sheltering possessions to avoid paying excessive taxes or incurring liability. Placing property in the name of children or spouses, establishing offshore enterprises, or forming limited liability corporations, LLCs, are several ways the wealthy routinely hide assets. But similar home asset protection options are available for average income individuals and families. Lawyers can help families form partnerships or LLCs for tax savings; place residences in a land trust; or form a living trust to ensure that assets are available when needed, not just upon the death of the head of household. Homeowners can avoid running the risk of losing savings or selling the house to pay judgments or excessive taxes. Heir property stays in tact without local, state, or federal seizure; and survivors can benefit from property that can easily be transferred without incurring hefty fees or tax levies. Unlike a brick and mortar structure, our heavenly "house" is one that can never undergo foreclosure: "For we know that if our earthly house of this tabernacle were dissolved, we have a building of God, an house not made with hands, eternal in the heavens" (II Corinthians 5:1).
Individuals interested in home asset protection should seek legal counsel before getting served with a lawsuit or judgment. Once litigation has begun, it is really too late to put an effective plan in place. Lawyers who are adept at estate planning or professional real estate brokers can advise clients as to how real property and possessions can best be protected. Even if creditors are successful in winning judgments; or even if the federal or state government has a legitimate case for collecting back taxes, homeowners can rest assured that they won't have to sell or move out of the residence to satisfy creditors. Legal counselors will provide several options for home asset protection, including placing the property in a land trust, forming a limited liability corporation consisting of family members (in which case all assets become the property of the corporation), or forming and transferring assets under another business or named individual, also known as a trustee.
While there are online companies which advertise do-it-yourself home asset protection, individuals may want to have attorneys review paperwork to ensure that plans are properly structured and ownership remains secure. Laws may vary according to an individual's state of residence, age or annual net income. Business owners who are faced with closures due to failing sales, Chapter 11 bankruptcy, or a lack of bank funding may seriously consider home asset protection to retain ownership of personal property. In the case of a Chapter 11 filing, court-appointed trustees oversee the liquidation of corporate assets, and creditors step in to help manage a failing enterprise. In that case, business property would fall under the jurisdiction of the court and new managers. But no one wants to lose a business and become bereft of personal property at the same time. For this reason alone, sole proprietors, partnerships and small business owners should take a good hard look at asset protection. There is not much anyone can do about a failing national economy. However by utilizing legal means of protecting prized possessions, especially real property, homeowners can at least hold onto a roof over their head, irreplaceable memories, and mementos of more prosperous times.
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