Ways to Protect Your Home Before Legal Action

Protecting your assets is best handled in preparation for circumstances, not as a quick response to them. It is important to remember that these steps should be taken before any legal action, such as a lawsuit, has been filed.  Below are several common ways that your personal or primary home can be protected should a legal cause ever happen.

Homestead Exemption

Almost every state has statutes that protect a certain amount of value of your home from creditors or during bankruptcy.  Essentially if someone such as a creditor files a lawsuit against a respondent, the resulting case may require the sale of the home.  The creditor will only get the remaining balance after selling fees, the mortgage balance and the homestead exemption amount.  If homeowners want to take advantage of this exemption, they should contact us.

Tenancy by the Entirety

Certain states offer unique protection called “tenancy by the entirety.”  Essentially this protects the home if one spouse is sued for reasons that have nothing to do with the other spouse.  Essentially this law asserts that it is not fair for one spouse to lose their home because of the actions of the other.  Even if your state does not have this law in the books you can accomplish the same result in the other ways described herein.

Create a Domestic Asset Protection Trust

This is a self-settled trust created and protected under certain state statutes.  In general, these types of trusts are becoming more accepted each year as new states adopt some form of DAPT trust laws.  This type of trust can provide certain protections to homes, farms, vacation homes or beach houses that you plan on keeping for life or a very long time.  In most states, the longer a property is held in a DAPT, the more it will be protected in the future.

Speak with a professional today

There are many ways in which your personal and business assets can be protected.  Perhaps you run a business where you must take financial risks.  Putting the house in your low-risk spouse’s name, for example, could help protect your home should legal concerns arise.  You may also consider getting an “Umbrella Risk” insurance policy that protects you from a wide variety of situations.  These Asset Protection techniques should be components in your Asset Protection System™.  Remember that it is wisest to plan for a storm while the skies above are blue.

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How to Protect Items of Sentimental Value in Estate Planning

When we think of estate planning or writing a will, we often think of big-ticket items.  This includes items such as real estate, expensive items, vehicles, retirement plans, business, and personal investments.  While these items have a monetary value associated with them, they are not always the most important possessions in a persons’ life.  It is vital that when a person passes away, they know their Items that have sentimental value have been considered as well.  This includes things like family heirlooms, paintings, jewelry, antiques or anything that has an emotional attachment associated with the property.  Many individuals seek peace of mind by knowing that their wishes as followed and that the desired party receives the items that were meant for them.  Below is information about a personal property memorandum and how this document can be easier and more direct than a traditional will when it comes to sentimental items.

Why a personal property memorandum can be an ideal choice

A will or trust can become a lengthy and cumbersome document to constantly change or make addendums to.  This is especially the case if you are an active collector and need to add specific directions with each new addition.  The process of updating a will or trust usually requires a formal codicil or trust amendment for even minor changes to go into effect.  If you utilize a personal property memorandum, you can transform these legacies without worrying about all the traditional formalities.  It’s typically much less complicated to merely remove an old memorandum and replace it with a brand-new one when you want to make changes.  This can also avoid potential conflict in the future because the dispersal of personal property can be outlined.

It is important to realize that the validity and use of a personal property memorandum is handled on a state law basis.  Some states require that the memorandum needs to be specially stated in your last will and testament or revocable living trust, while others just won’t recognize this sort of a casual checklist in any way.  Making a list of your most treasured items and deciding which family members and friends will receive them can be highly beneficial.

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