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How Vulnerable is Someone’s Home To A Lawsuit?

A person’s home can be subject to lawsuits if it is in their individual name at the time someone files suit against them. In Missouri and many other states, if someone is married and the home is owned jointly with a spouse, that home wouldn’t be subject to lawsuit if the suit was brought against only one spouse. One of the best planning techniques for homes that are unprotected and vulnerable is to simply borrow out the equity and place the borrowed funds into a protected type of environment if possible. If there isn’t much equity in the home, then a lawsuit creditor would be unlikely to waste the time and money to go after it.

Is Asset Protection Effective If Someone Is Currently Engaged In Or Threatened With Litigation?

If someone is threatened with being sued or is in the middle of a lawsuit, the options for asset protection will be much more limited. If someone in that situation transferred assets out of their name to make them insolvent, and a judgment is obtained against them, the court will most likely rule those assets were fraudulently transferred. The court would then set the transfer aside and allow the creditor access to the assets.

How Do Asset Protection Plans Affect Specific Assets?

Nearly any asset can have some kind of shield put around it in some way. Business interests and investments are easier to deal with than real estate. Those types of investments can be placed into a limited liability company or transferred into trusts that are domiciled in a state or foreign country with strong asset protection laws. Real estate, on the other hand, is a little more difficult to protect. For example, someone with real estate in Missouri can place that property into a limited liability company and then transfer ownership of the limited liability company to a Nevada trust. However, the real estate will still be in Missouri, so in the event that a lawsuit is filed against them, there is a good chance the judge may disregard the fact that the property is subject to a Nevada trust and allow the creditor to execute against the real estate.

How Unsafe Is It For Persons To Own Their Investments In Their Individual Names?

From an asset protection standpoint, it’s 100% unsafe for persons to own investments in their individual names. If the investment is owned in a person’s individual name and there is a judgment against them or they end up in bankruptcy, whatever is owned in that person’s individual name is subject to the creditor.

Can The Same Strategy Protect A Vacation Home, Rental Or Commercial Property As With A Home?

To try and protect rentals or commercial properties, we will generally use limited liability companies to start with and then we may also possibly use an asset protection trust to own the limited liability companies. Vacation homes are not a great asset to hold in a domestic asset protection trust or a limited liability entity. The strategy with vacation homes will generally be more along the lines of borrowing out the equity.

Can Someone Protect Their Retirement From Creditors?

With very limited exceptions, a person’s retirement assets won’t be available to creditors as long as those retirement assets are maintained in retirement plans, like a 401(k), a pension or an IRA.

There is also planning available to protect assets you hope your children will inherit someday. Good estate planning can ensure that assets will be left to the next generation so that their inheritances won’t be lost if the person is hit with lawsuits or other financial difficulties. Their inheritances can also be protected from being lost to an ex-spouse in the event of a failed marriage.

For more information on Asset Protection For Homes & Inheritance, a free initial consultation is your next best step. Get the information and legal answers you’re seeking by calling 314-454-9100 ext.125 today.

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The Attorneys at Estate Plan Strategies, LLC assist clients with Estate Planning, Wills, Trusts, Revocable Trusts, Asset Protection, Special Needs Planning, Charitable Giving, Probate and Estate Administration, and Business Services in the metropolitan St.Louis, Missouri area. Areas we serve include Clayton, Chesterfield, Ballwin, Creve Coeur, Richmond Heights, Maryland Heights, Florissant, Hazelwood, Affton, Ladue, Fenton, University City, Sunset Hills in St. Louis County, St. Charles County, Jefferson County, Franklin County and Lincoln County.

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