Here are some more great questions from some of my students.

Q. I have a home with equity of $400,000. Should this be in a trust?

A. No matter the value of your home, holding it in a trust will let you avoid probate and if you have the correct trust, let you avoid estate taxes. Guaranteed Millionaire will explain this in detail.

Q. I am interested in protecting my dad’s assets from a woman he is not 100% sure of. I would appreciate any information you can give me on transferring the assets into my name (only child) and giving him a life estate.

A. You asked if I had any info on transferring your dad’s assets into your name and giving him a life estate. Yes, you can have your dad transfer the property into your name with a life estate, but you will probably get better tax treatment if you inherit the property, because you will get a step-up in the basis of his property at his death. You may be able to accomplish the same thing by having him form a trust. That way he still “owns” his property, but he can tell his girlfriend it is in trust for you.

Q. I owe $100,000 in credit card debt. How do I protect myself and my wife from having our bank accounts attached or having a lien put on our real estate holdings?

A. You asked how to protect yourself from the $100,000 you owe the bank in credit card debt. Unfortunately the time to protect yourself is before you get in trouble. Property that is transferred in anticipation of bankruptcy or litigation will be brought back by the court using fraudulent conveyance statutes. You remember how the court brought back the property Bernie Madoff transferred? If you have three years before everything caves in, then you will want to get Accumulation and Preservation of Wealth and structure your assets accordingly.

Q. How do I protect an estate from being scammed by probate lawyers?

A. Unfortunately, I know where you are coming from, because I have seen this happen in my own family. In Guaranteed Millionaire, I write about my wife’s uncle who flew his plane into the ground and how the lawyers litigated the estate until the money ran out leaving the children penniless. The best way to avoid that type of lawyer is to avoid probate. Having a trust is not enough. A trust will only avoid probate if it is properly funded and used. Guaranteed Millionaire discusses how to fund your trust.

Q. I want to put all my assets (home, vehicles, etc.) into one entity name where that entity is owned/controlled by myself and my children and thus cannot be divided by death, divorce or otherwise. Thus all assets belong to the entity. How do we do that?

A. Unfortunately, I don’t know why you want to move all your assets, so it is hard to advise you what entity to use. There really isn’t anything that can do what I think you want to do. You will own the entity, whichever one you use, and as one of your assets, it will be subject to all the issues any other property you own is exposed to. You will want to use a trust to avoid probate and probably an LLC to hold assets. I discuss and describe the different entities and how to use them in Accumulation and Preservation of Wealth.

Q. I was injured in a motor vehicle accident and per the attorney’s advice, will sign a “Release of all Claims.” This will place me at risk to satisfy on their behalf any judgment against them arising in any way out of aforesaid accident. What trust will protect all my retirement assets from this risk?

A. I understand that you want to know how to protect your retirement assets when you sign a release of claims form from an accident, so you can get paid. You are smart to want to take action to protect yourself before you sign anything. The time to protect yourself is before you get in trouble. Generally most retirement and IRA assets are protected under ERISA and 408 laws so you are probably OK. However I would refer your questions to legal counsel. Property that is transferred in anticipation of bankruptcy or litigation will be brought back by the court. Unfortunately, if you are in legal trouble you may be too late. You remember how the court brought back the property Bernie Madoff transferred? Generally you have to transfer things three years in advance. You will want to get my set Accumulation and Preservation of Wealth and structure your assets accordingly.

Q. What is the best method for protecting a primary residence that is debt free?

A. There is no one way to best protect a debt free residence. What are you protecting it from? How much of a liability do you have? I would probably use a combination of umbrella insurance and legal structuring. The biggest problem is that if you transfer your home into a legal entity to protect it, you lose many great tax benefits designed for the homeowner. I go over the different legal tools in detail and how they are used in my book, Guaranteed Millionaire and in my course Accumulation and Preservation of Wealth.

Q. Scenario: Son holds property. Beneficiaries are mother and brother. Need trust that will move home to beneficiaries in event of death, but at time of establishing trust ALSO make all three parties beneficiaries WITH dual Trusteeship of the two brothers. Need to protect property in event of marriage of title holding son AND not lose Florida homestead rights (want homestead rights to go to mother and brother as well as title holding son when trust is established). AND protect the built in tax safeguards via save our homes in Florida. How can this be done? A standard living trust or revocable trust does not seem to meet the simple needs for only title matters. A land or personal property trust seems better.

A. You can form a trust that moves your home to your three beneficiaries, while having dual trustees. It will even protect your property in the event of marriage and if it has the correct language you will not lose your homestead rights. It will be a living trust uniquely drafted. You throw around the names of several kinds of trusts. Living trusts, personal property trusts, and land trust are all revocable trusts. The reality is that there are only revocable and irrevocable trusts. How the trust is worded is up to you. I spend a lot f time educating you about trusts and how to use them in Accumulation and Preservation of Wealth.

Q. What is the best way to protect my assets (house that I live in and savings I have including retirement account) from frivolous lawsuits?

A. There is no single best way to protect your assets. Without talking to you it is hard to know from where the lawsuit will come. Your retirement assets are protected from lawsuits by ERISA, but there are some exceptions. An IRA’s protection depends upon state law, but the IRAs are generally protected. As for your house, there are a number of entities that might work for you. Each one has their advantages and drawbacks. Usually, you just carry a big insurance policy with an umbrella provision in order to protect the house. Obviously, I can’t tell you about every entity and how to use it here. I have this discussion and a description of the different entities and how to use them in Accumulation and Preservation of Wealth.

Q. What are the safest and most legitimate offshore corporations to put your assets in?

A. There are many legitimate offshore banks and corporations. It is difficult to answer the offshore question without knowing your intentions. Offshore banking is often associated with organized crime, tax evasion and money laundering, and therefore people involved with it are often not reputable. Since 9/11 in the United States, laws have been passed to more fully regulate offshore banks. Offshore banking does not prevent assets from being subject to personal taxes and lawsuits. Although offshore banks may decide not to report income to other tax authorities, and have no legal obligation to do so as they are protected by United States law, this does not make the non-declaration of the income by the tax-payer or non payment of income tax legal. If you are sued and have money offshore, the court can put you in jail until you get the money. I have investigated offshore banking and have determined that other US options can offer better protection.

Q. Is there a legal way to protect assets from a bankruptcy trustee? Can I sell a non-exempt asset and put it in an IRA?

A. Unfortunately the time to protect yourself is before you get in trouble. Property that is transferred in anticipation of bankruptcy or after litigation starts will be brought back by the court. You remember how the court brought back the property Bernie Madoff transferred?

Depending on what state you live in and the type of property you transfer, it needs to be transferred one to three years before the proceeding starts, or everything is available to your creditors. IRAs are generally protected under a recent US Supreme Court ruling and other retirement accounts are protected under ERISA. Those assets are not usually available to creditors, so if you make your usual contribution, the judge may leave it alone. You can also buy life insurance and it may be protected if you have owned it for more than a year. In the Accumulation and Preservation of Wealth I go over how to best structure your assets to protect yourself.

Q. I own 4 rental properties. How do I insulate them (and my personal residence) from lawsuits and still retain depreciation and cash flow from them?

A. There is no single best way to protect your assets. Without talking to you it is hard to know your situation. Usually it is best to hold rental properties in an LLC. It can be structured as a “pass through” entity, so you get the tax benefits. As for your house, there are a number of entities that might work for you. Each has advantages and drawbacks. Usually, you don’t use an entity, because you use the tax benefits associated with a personal residence. Obviously I can’t tell you about every entity and how to use it here. I have this discussion and a description of the different entities and how to use them in Accumulation and Preservation of Wealth.

Q. I was wondering about IUL’s as a form of asset protection.

A. Indexed Universal Life can be a good way to protect assets. It depends on your state law. It also depends on how secure the insurance company is. (It won’t do any good to invest if they go under.) And finally it depends on how well the agent structures the policy. Sometimes the agent gets greedy and makes way too much. I have a CPA on my staff who evaluates this type of stuff if you are interested. I also have a CD, How to Evaluate a Life Insurance Policy on my website.

Q. My wife can no longer pay on her credit cards. We are letting them go to charge off. My credit is good and I pay all the household bills. How can we protect our house and the equity we have?

A. Unfortunately, if you wait until you are already in trouble to do your planning, it is usually too late to save your assets. If your wife has already quit paying and if you own everything as a joint tenant with your wife, then everything is at risk. Even if you transferred everything into your name before she quit paying, under the Uniform Fraudulent Conveyance Act, if your wife takes out bankruptcy then the Court will go back for at least one year and can go back for up to four years and undo any transactions. The time to do the planning is before you are in trouble. You can try and move everything into your name, but you must recognize that it can be undone. State law is governing in this situation, so it depends on which state you are in.