home equity and lifestyle protection trust

We Could All Use a Little H.E.L.P. Trust

Dear Friends, Colleagues, and Clients,

The journey of our entrepreneurs provides essential groundbreaking advancements for industry and society. Unfortunately, not all of those who follow this path are happy with some of the side effects that come with being a successful businessperson. While entrepreneurship offers many lucrative financial results, it does not come without risks that expose the entrepreneur to lawsuits, both legitimate and frivolous.

Tech industry innovator Steve is just such an entrepreneur. Prosperous in his pursuits, Steve now has a large estate he wants to protect. He is especially interested in safeguarding his $10 million-plus Silicon Valley home for his wife, children, and grandchildren. As a successful businessperson, he is rightfully concerned about the potential for lawsuits in this litigious industry. Luckily for Steve, we here at Jeffrey M. Verdon Law Group have a solution.

Here’s the How

Introducing the H.E.L.P. Trust™ (Home Equity and Lifestyle Protection Trust), a domestic LLC and dynasty trust lease back strategy that fuses legacy planning and protection while taking advantage of Nevada’s more protective trust laws.

With the H.E.L.P. Trust, Steve can use his generous $12.060M federal gift tax exemption by:

  1.  transferring the title of his house to a single member LLC.
  2. depositing the LLC interest into the trust.
  3. renting the house from the LLC at fair value rent.

Thus, removing the value of the home from his gross estate, and more importantly, becoming a tenant (not an owner) so the home will not be at risk in case of an unforeseen lawsuit. The H.E.L.P. Trust allows Steve to feel secure that his business can continue breaking new ground while also protecting his existing estate from future misadventures.

Here’s the Why

Down the line, if Steve’s company is exposed to a recall for a defective product and lawsuits ensue, his home will be fully protected. While the business may be exposed to a potential hit, 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 held liable for the business’s legal claims.

Litigants may consider attacking his H.E.L.P. Trust, but after determining that road would be expensive and provide a very uncertain pay day, they will likely decide against it. Steve is now able to avoid the personal liability of the lawsuit with a very modest monetary settlement. With the H.E.L.P. Trust, his home was never at risk. 

Here’s the When

It’s time to get ahead of the lawsuit. If you reside in a state with a modest homestead exemption and wish to protect the equity in your home from future lawsuit judgement creditors, you are likely a candidate for the H.E.L.P. Trust.

For example, California limits the protection of home equity to the greater of 50% of the medium value in your community up to a maximum of $600,000. There is no protection for equity in a second or vacation home.

Contact us now and prepare yourself from those unforeseen, pesky lawsuit creditors and predators. To learn more, watch our video HERE.

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 jeff@jmvlaw.com or 949-333-8143.


Posted in Client Alert.