Protecting the Equity in Your Residence

Protecting the Equity in Your Residence

Dear Friends, Colleagues, and Clients,

The journey of our entrepreneurs provides essential groundbreaking advancements for industry and society. Unfortunately, not all of them who follow this path are happy with the destination – putting the entrepreneur at risk of lawsuits, legitimate and frivolous. Steve is just such an entrepreneur.

Successful in his pursuits, Steve now has a large estate he wants to protect for his children – especially his Silicon Valley personal residence. On advice from counsel, he sets up an irrevocable dynasty trust for his wife, children and grandchildren using the Nevada more protective trust laws. Using his generous $12.060M federal gift tax exemption, Steve transfers the title of the house to the trust and rents it from the trust at fair value rent and removing the value of the home from his gross estate, and more importantly, became a tenant (and not an owner) so the home will not be at risk in case of an unforeseen lawsuit.

Steve feels secure that his business can continue breaking new ground while protecting his existing estate from future misadventures. As time goes on, Steve’s company does recall a defective product and the lawsuits ensue.

While the business does take some hits, the significant equity in Steve’s personal residence is safe because he established a legal entity separate from himself and his business that could not be liable for the business’s legal claims. Litigants considered attacking the trust, but after determining that road would be expensive and uncertain, Steve was able to avoid the personal liability of the lawsuit with a very modest monetary settlement. Steve’s home was never under threat.

If you are sitting on substantial equity in your residence or vacation homes, and fret over the potential loss of these valued real estate assets from lawsuit risk presented by your business activities, consider using the NV trust gift/leaseback to protect your homestead from those unforeseen pesky lawsuit creditors and predators.

To learn more, CLICK HERE to view our video.

Jeffrey M. Verdon, Esq. Jeffrey M. Verdon, Attorney at Law

For more information about any of the information discussed in this Client Alert, or any other income or estate tax planning or asset protection planning assistance, please contact the: Jeffrey M. Verdon Law Group, LLP at or 949-333-8143.


Posted in Client Alert.