Re: Here’s what Joe did. - Posted by John Katitus
Posted by John Katitus on May 24, 1999 at 01:04:46:
Joe could also line his files with properly dated and even notarized (if he wanted to) assignment statements to any and all COMPLETELY TRUSTED relatives, etc. Then, when the time came, he could produce proof that he assigned the interest to any one of them he wanted. And they could assign it back.
I LIKE WHAT JOE DID! - Posted by mike
Posted by mike on May 23, 1999 at 12:32:50:
Well you know what
I SURE LIKE IT!
Yours,
The Devil,
Just kidding
I’m Mike
off-shore trusts, etc. - Posted by Alex Gurevich, TX
Posted by Alex Gurevich, TX on May 22, 1999 at 20:51:47:
>>I’m not an advocate of going to extraordinary lengths to establish offshore trusts, foreign bank accounts,
>>or some of the other techniques you hear about.
For a long time I could not figure the use of off-shore trusts, etc. for asset protection, until a seminar several months ago by one of the area asset protection lawyers.
It’s all a matter of how much is there to protect, at what costs, and what kind of protection is obtained.
Speaking of being questioned under oath about assets and assets being reachable by the creditors. The main reason to set up your affairs in a way where an off-shore trust owns assets is to not have to answer to these type of questions. This is simply because the trustee/manager of such entity does not fall under the jurisdiction of the US court system. As opposed to you and me (s)he does not have to travel to the US to appear in court and take oath.
The lawyer furnished an example where a client had a free and clear multimillion dollar farm/ranch (owned by an offshore entity) and someone got killed on the land. (It’s been some time and I don’t remember all particulars precisely.) Major lawsuit was filed against the landowner. Even though there was a liability insurance for whatever reason the insurance co. found a way not to pay. The off-shore trustee instanly snactioned a quick sale of the property at about 80-85% of value. By the time the court got to hearing and rendering the judgment, the funds were long wired to the offshore account. Neither the trustee nor the funds, nor the bank holding the funds were reachable by the jurisdiction of the court.
Another possibility: reduce equity - Posted by Ben
Posted by Ben on May 22, 1999 at 20:03:22:
Another important aspect of asset protection, which I believe Bronchick also recommends,is having one entity
that you control take out a mortgage on the other entity’s property.This must all be done at arm’s length
with market value amounts and a proper payment schedule adhered to. Also, all documents must be publicly recorded so now even when the attorney finds the assets, he gets another surprise, the property is mortgaged to the hilt. If you appear riddled with debt
this will further deter any attorney from pursuing you.
Re: JPiper what are your reasons for Land Trust? - Posted by JSmith
Posted by JSmith on May 22, 1999 at 15:07:26:
In my total business career (not all of this in real estate) I have been served with 4 lawsuits. One of those was in my mid-20’s regarding a “non-compete agreement”. The other 3 have been in the last 12 months. Each of these last three was a frivolous suit?.and each was dropped, AFTER I paid my attorney legal fees. I think the point here is that an unfortunate commentary on society today is that some people are out to sue other people?.whether the suit has merit or not, and not just over matters related to real estate?.but over almost anything that could be dreamed up. And sometimes people lose lawsuits that are so incredible as to make your jaw drop?.you can hardly believe that a court would have ruled as they did.
In light of the above I think it only makes sense to take some steps toward asset protection.
This is not asset protection, this is secrecy. Asset protection is the difference between personal and business. If you want to keep your personal assets from being tagged from lawsuits then you need corporations and insurance.
A land trust is quite a simple vehicle to employ which does several things. One is to conceal assets. An obvious statement is that before anyone spends very much money on a lawsuit?.whether it be the client, or the attorney in a contingency suit?..they are going to attempt to figure out whether any judgment that they may win will be collectible. To the extent that your assets are less visible through the use of a land trust I would think this makes a great deal of sense.
Unless you are living a meager lifestyle and not doing anything that may hint that you make money, this is nonsense. An attorney subs out to companies for very little costs to find out your assets. This going down to the courthouse and doing an asset search went out with assumptions in the 80’s. Besides, just because your name may not show up at one particular place has no bearing whatsoever. The logical deduction is to see what you are hiding. This is all moot because information today is very easy to get.
Employing a land trust takes next to no time at all, so it’s hard to see where you come up with the concept of “going out of my way”.
As you say, an attorney willing to spend both the time and money to figure out whether I have other assets will accomplish his goal. He’ll get it figured out. But if the assets aren’t obvious to begin with, perhaps he won’t make the choice to go down this road on a fishing expedition. Perhaps he’ll turn to his client for the money to subsidize his efforts. Perhaps the client will be unwilling or unable to finance a fishing expedition. I can’t predict the future, or the motivations of other people?..but I think paying no attention to issues of this type is foolhardy.
It simply foolhardy to believe that you are combining real asset protection with secrecy. Your secrecy has nothing to do with lawsuits and the ease to find out what you have.
I’m not an advocate of going to extraordinary lengths to establish offshore trusts, foreign bank accounts, or some of the other techniques you hear about. But I am an advocate of reducing my personal exposure by taking simple steps?.just as I’m an advocat
Re: A couple thoughts … - Posted by HankM
Posted by HankM on May 23, 1999 at 06:47:18:
Read the next sentence;) The one that says something about looking/probing for assets BEFORE filing suit just to see if there is anything to sieze.
Also, read JP’s post at the very top. Some interesting/informative stuff there.
Hank
Re: Here’s what Joe did. - Posted by JohnBoy
Posted by JohnBoy on May 24, 1999 at 11:06:12:
I think this is the better way to go. Line your files with notarized assignments. You hang on to the paper work in case you ever needed to use it. If you sell the property before ever needing it, then tear up the assignment since your the only one with a copy of it. If you ever needed it then you can produce a copy with proof of when the assignment actually took place.
I’ve been thinking along the sames lines as your talking about since I was told unless the assignment has been notarized it could be over turned against you. Since anyone could easily draw up an assignment and back date it for the purpose of saving a property from a lawsuit I was told a court would probably over turn the assignment unless it was notarized to prove when the assignment actually took place.
Re: JPiper what are your reasons for Land Trust? - Posted by JPiper
Posted by JPiper on May 22, 1999 at 23:52:06:
Did you really read my posts? It might help if you re-read. Perhaps you will recall, or you can go read my original post, which discussed a land trust, with a corp trustee, and an LLC as beneficiary. Just so that you know, I don’t agree with you that secrecy has no value in asset protection. Do a little reading and perhaps you’ll understand better what function the land trust, when combined with the LLC plays.
JPiper