The Elder and Disability Law Firm, APC
Remove Your Home From Reach Of Claimants
If you were to be the target of legal actions anything could happen, and some people are in occupations that leave them particularly vulnerable to lawsuits. You can't react after you become apprised of a pending action because this could be construed as an improper transfer of assets. So, being proactive about asset protection is the key to keeping your resources out of the reach of claimants.
Along these lines you are definitely going to want to protect your home, and one way that this can be done is through the creation of a qualified personal residence trust.
You can remain living in the home for a term that you state when you draw up the trust agreement so your life doesn't change dramatically. In the agreement you name a beneficiary who would assume ownership of the property after the term expires.
Once you place the home into the trust it is no longer your personal property and as a result it is protected from creditors and claimants. And, you are also removing your home from your estate so its value will not count as your resources are being tallied up to assess potential estate tax exposure.
The gift tax is applicable, but the taxable value of the gift is dramatically reduced by the interest that you retain in the home while you continue to live in it.
Qualified personal residence trusts can be a good option for many people, providing asset protection and estate tax efficiency. To learn more about these and other somewhat advanced estate planning tools simply take a moment to arrange for a consultation with a seasoned, savvy San Bernardino estate planning lawyer.