Some things you can do to protect your assets for your family are easy to do and some are very difficult. Why not do the easy ones?
First of all you have to remember there are no simple magic trusts. If there was a magic trust that insulated a person from creditors and liabilities most people would get it. With asset protection you want to take steps to make you less of a target. You want to make it harder for creditors to get at your assets. It’s not going to a wall but rather you are placing hurdles. If you place enough hurdles you will be able to preserve your assets!
Here are a few easy things you can do:
1) FILE A HOMESTEAD EXEMPTION ON YOUR HOUSE – Though it’s not a huge number a homestead exemption protects equity in your home. Just get the form and file with the county recorder’s office.
2) CHANGE THE NAME OF YOUR TRUST – Don’t name your trust in your name. Put it in some other generic name. Call it the “Main Street Trust” or the “Blue Jeans Trust” or the “ABC Trust.” Call it anything but don’t put your name on the trust. Remember a lot of real estate databases that people use to look up targets for lawsuits are driven by names. If your name isn’t on your house it will be much harder to find!
3) SET UP A SPEND THRIFT TRUST FOR YOUR FAMILY – Though you can’t set up a magic trust for yourself you can set up a magic trust for your family. Most people do this for their kids to receive their assets after death. However, you can do it during life also. There is certainly more trust involved when you do it during life as you have to “give away” the assets but you can build in some protections.
4) SET UP A CORPORATION OR LLC – A business provides good asset protection and is very easy to set up. If you have a legitimate business, rental properties, or other such assets set up a legal entity and run it like a true business entity!
5) SET UP AN IRREVOCABLE HOUSE TRUST – It’s one of the simplest irrevocable trusts there are. A Qualified Personal Residence Trust (“QPRT”) is a great way to protect a valuable home for your loved ones!
I have other tricks and tools. Let’s talk about how I can help protect YOUR assets!