In this episode of Coffee with Carl, attorney Carl Zoellner explains how a personal residence privacy trust may be the missing piece to complete your overall anonymity strategy.

 

If you have an asset protection structure in place, you’ve protected your business investments. But what about your home? If you own a high-value personal residence or your home is completely paid off, you may not want potential plaintiff’s attorneys to see your ownership.

Thus, the reason for the personal residence privacy trust. Personally, I use this tool in every state I can. By this, I mean that I’m not differentiating how I use this tool based on any given state’s homestead exemption policies.

If we only focus on anonymity, the personal residence privacy trust can be the missing puzzle piece to make you look unattractive to potential creditors. This tool is most relevant for those who own investment rental properties and want to avoid plaintiff’s attorneys finding everything they own.

Client Example

I’ve actually worked with clients who’ve experienced the pain that can come from not having anonymity for one’s personal residence. In that case, our client owned their personal residence in California and a rental property in Colorado. Unfortunately, the plaintiff being able to see our client’s ownership of their personal residence in California stalled the negotiation process. Since the plaintiff could see our client’s high-value home, they assumed the client had substantial financial resources. Thus, they did not want to settle for insurance payouts.

How it Works

As you can see, masking your ownership of your home can be a boon to your overall asset protection strategy. With personal residence trusts, you accomplish this by deeding your personal residence into a land trust. Then, use a nominee trustee for the trust. The trustee should not be you as an individual but should instead be another asset protection entity; normally, you’ll use a Wyoming LLC set up for this sole purpose. Once finished, if you look at a personal residence in the Secretary of State’s online database, you’ll see (for example) 123 Main Street, LLC, as trustee of the 123 Main Street trust. The beneficial interest in the land trust would be held by your living trust.

By the way, for those of you who have your personal residence in a state with unlimited (or 100%) homestead exemption: don’t worry. This tool does not violate homestead exemption requirements.

 

Watch as Carl details the benefits of using a personal residence privacy trust in conjunction with other business entities for asset protection and anonymity.

 

Resources mentioned in this video
Check out our Tax & Asset Protection Workshop for advanced business strategies
Find even more free business resources on our YouTube channel

 

Got an idea for a future Coffee with Carl? Send it to Carl at cwc@andersonadvisors.com.

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