For many people, their home equity is their largest single asset and a major retirement resource. 

For most people, their three largest assets are their home equity, their pension plan and their business. This brief article will review the various strategies you can use to protect your home equity from the claims of future creditors. 

Your first line of defense if a creditor seeks to take your home is the homestead law in your state. If that's not available or not adequate, you need to check on whether your state permits married couples to own real estate as "tenants by the entirety". If you're single or your state doesn't provide that form of protection, the next step is to explore the benefits of a qualified personal residence trust. Some advisors advocate putting your home into a family limited partnership - but I disagree due to tax considerations. Instead, you can borrow against your equity and put the cash into a FLP. A final resort is to put your home into a foreign grantor trust. For residents of California, any change in the form of ownership must be considered in relation to the proposition 13 lid on property tax exemptions.

Further details about protecting your home equity from future lawsuits  are available in our subscriber's web site. 

NOTICE: This Information is intended only for educational purposes and may be regarded as controversial by some legal experts. Readers should consult with a qualified  professional who is familiar with their specific financial and tax circumstances before adopting any ideas that are discussed in this article.

About the author:

Vernon Jacobs is a CPA/CLU who works as a tax author and consultant.   He can be reached by phone at (913) 362-9667.