I’m with SoCalFred - Posted by John Merchant, JD
Posted by John Merchant, JD on June 30, 2002 at 20:42:06:
Fred and I agree.
Why put all your RE eggs in one basket, with your own name & ID all over it, when you could diversify ownership into a number of entities, such as RE Trusts, that do not have your name or scent all over them?
And trusts are cheap and so easily set up that they’re basically trouble free…and remember you sure can’t do it AFTER the lawsuit hits you…that’s an obvious and voidable transfer that any court can set aside as an attempt to defraud creditors…but if your property at 123 Main St is owned now by 123 Main St Trust, with Joe Jones as the visible Trustee, and the mailing address is a P.O.Box somewhere, other than your house,that’s pretty darned good protection for you.
So if someone over there gets hurt and sues the owner, it won’t be you,and even if they win, the only asset they can grab, other than your liability insurance, would be that RE at 123 Main St.
And remember this point: the shoeshiner’s shoes quite often are never shined, and lawyers die without wills, and drive without insurance, and do other stupid things…so just because one tells he thinks trusts are a stupid waste of time is no reason for you to ignore good business tactics and fail to protect your own assets.
I remember a funny story that Wade Cook (himself a very tricky and cagey guy, not loved by one and all!) told in one of his little seminars he used to hold.
Seems WC had a Judgment against a guy who’d been a good customer of his, and had bought a bunch of his materials, and been to several of his expensive seminars. WC looked hard trying to find the guy’s assets, knowing the guy had a LOT of realty, in several states…and WC finally realized that the guy had done exactly what WC had advised him to do…put his assets in separate trusts, with different trustees, with other members of grantors family being the beneficiaries, so as to leave the Judgment debtor not only without property in his own name, but also without any beneficial right in those properties…so even if WC were to pin the guy down, in post-Judgment discovery, and the guy were to 'fess up to all the properties he’d put into various trusts, WC couldn’t get to them because of how careful the guy had been…all done by carefully following WC’s own directions!