Protecting Assets

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22tlane
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Protecting Assets

I have recently cashed in some investments and paid my house off. I have been wandering about protecting it from future problems that could arise (lawsuits, leins, irs, etc.) although I am not expecting any. Anyone had any experience or thoughts on this? I know you turds know all the answers:)

Edited by admin on 11/08/2014 - 06:06
Code The Plumber
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Nothing is certain in life

Nothing is certain in life but death and taxes.  If I were to become an evil rich person actually in possession of land unencumbered by liens when all the rest had succumbed to financial failings, my fear would be being taxed out of it as an asset while alive or as an inherited asset that wasn't already taxed to death while I was alive having not bled my fair share of stupidity with the rest.  I don't think there's a good way out of that short of the land being a commercial enterprise that outlives you.  Oh, the other way to protect it would be to have .gov on your side.  You seek wetlands protection!  I'm only 1/4 joking on that.

Jappleseed911
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22tlane wrote:I have

22tlane wrote:

I have recently cashed in some investments and paid my house off. I have been wandering about protecting it from future problems that could arise (lawsuits, leins, irs, etc.) although I am not expecting any. Anyone had any experience or thoughts on this? I know you turds know all the answers:)

This is a litigious society. From a normal everyday basis, you should put a no-fee (if they still exist) untapped Home Equity Line of Credit (HELOC) as a first place lien on the home covering as much of it's equity as you can. I.e. if you have a home worth $300k, I would shoot for a max-equity line of credit (ie $240k @ 80% LTV) if your income will qualify you. They usually go 10 or 15 years.

Key point is attorneys who work on contingency (meaning they get paid at the resolution of a case), on review of a potential 'slip and fall, etc' lawsuit brought about by a worker or gardener, will do an asset check of you and the property to see if the suit is worth pursuing. Basically, when an attorney sees a paid off home, they see a $300k golden goose to be plundered.  With a massive HELOC showing in the property check, the attorney 'sees' a property that is heavily encumbered; there is potentially no equity to be stolen or ransomed in a frivolous lawsuit/settlement and usually the attorney will pass on the suit. Remember, frivolous lawsuits are usually brought about by folks who generally have few assets; they could not afford to put the attorney on retainer.

The other key point is, if some FUBAR situation happens, you have the ability to draw down the equity via check and then give whatever entity is hassling you the finger while yelling "ok you bastards, take it now". Of course you want to keep the issued HELOC checks in a very safe place (safe deposit box).

It is your ultimate failsafe...the red button...the omega plan..."break glass in case of emergency".

Here is one lender's product as an example:

=====================================

Huntington has a promotion going on now for HELOC through the end of March.

Prime - 0.26 (2.99% APR now) if the line is $50,000 - $99,999 and if you draw $20,000 at closing.

Prime - 0.51 (2.74%APR now) if the line is more than $100,000 and if you draw $20,000 at closing.

However, if you setup automatic payment through your Huntington checking account, the rate drops by 0.25%.

However, if you have HELOC for more than $100,000 and setup automatic payment through Huntington checking account, the rate drops again to 2.49%APR. This is a very good deal.

No closing cost, no annual fee if you keep account open for 3 years. I was told that the $20,000 you draw at closing can be paid off any time after closing.

There is a promotion going on for $100 bonus if you open a personal checking account and $200 for a business account at Huntington through 2/27/11.

I believe the bank only serves Michigan, Indiana, Ohio, West Virginia, Pennsylvania, and Kentucky.

https://www.huntington.com/homeline/?source=hp_ss_homeline

survivalwstyle
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if i

were in your shoes i would quietly step oFF the map.

__________________

enjoy everyday

A55H0LE_Lawyer
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When I graduated from law

When I graduated from law shchool, the first thing I did was to set up an offshore asset protection scheme involving a limited partnership and an offshore trust.  If your assets are sufficient, then it may be well worth it.  Google offshore asset protection and find a reputable US attorney who has foreign contacts. Expect to pay $25k to set it all up, maybe $2.5k per year operating expenses and $2.5k additional accounting expenses. 

Otherwise some gold bars and junk silver coin in secure locations works very well.

Also, you didn't mention whether you have spouse/children.  You can gift up to $5m with no estate/gift tax consequences this year.  That's a component of a great overall plan, and I am utilizing it myself. Imagine gifting gold now before it reaches $10k per ounce!

Good luck, don't rely on internet strangers, get seek out multiple professionals and then apply your best judgement. 

asymptote
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This is an area I'm really

This is an area I'm really concerned about, and I'm NOT in the USA. Even Australia has this kind of problem. You need to drill down and understand the concept of ownership. What does it mean to own a gold bar? What does it mean to own a house?

First consider, who recognizes your ownership. Property ownership is -CORE- to the formation of a country. Without ownership who is willing to risk your efforts only to have them taken away. So for property ownership you have to have a power collective, that can defend the area from other wishing to invade and take it. That's the militaries job. Next you have to have the ability to sell, but with sell comes the ability to track ownership. This means you have to have a register to arbitrate claims on land. A titles office. Next, you need a arbitration centre to handle disputes, a court system, and along with the court system the power to enforce the judgments, that's the police. 

So, to own land, and hence a home you have to have confidence in all of the above working in a fair, systematic, reliable and honorable manner so that trust can be had amongst strangers.

In short, you can only claim ownership if you can -defend- and keep what you want to own.

That's why so many have sold their homes, bought PM's and rent. To wait this out. In coming times desperate government will do desperate things, and what you can defend may be limited. Flexibility is key. Owning and keeping bars may well appear safer than property in some locations. 

To me, a highly socialist government like Australia is not so far away from outright communism as they would like to admit. I just paid a 'Flood Levy' A doogooders tax of around a grand, to pay for 'a flood' in another state of which I'm sure none of the money will be allocated to. 

Can you defend you home from taxes from an insolvent government. Will you, be considered wealthy and pay a land tax surcharge to have pay for someone else's underwater mortgage? Food for thought... I do agree that debt free is best though...

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