In our litigious society today, it is very important to plan ahead to protect your hard earned assets in the event that you are sued because of an automobile accident or an irate customer.When planning your asset protection strategy, you might be asking yourself this question: Is there such a thing as free asset protection?.In fact there is. Some of the best asset protection available is FREE and provided by the laws of your own home state.
For example, many states offer protection called the Homestead Exemption which will protect at least a portion of your home equity against lawsuits and creditor judgments. The homestead exemption protects the equity in your primary residence from most creditors up to the exemption amount provided by state law.The amount of this exemption varies widely from state to state. In Alabama the exemption is only $5,000 but in states like Florida and Texas it is unlimited. If you happen to live in a state with an unlimited homestead exemption you are in much better shape than the person who resides in Rhode Island, a state that has no homestead exemption protection at all.So do you need to protect your home then? That depends on the amount of protection offered by your own home state.
The rule of thumb is if your state's homestead exemption does not at least meet or exceed the equity in your home you should take action to protect your exposed home equity immediately.Here are some caveats: The homestead exemption is not automatic in most states. The exemption applies only to your primary residence and not any investment property.
To qualify for the homestead exemption you will have to establish residency in the state of your homestead and some states also require the filing of special documents to register your home as your homestead.To find out more about the specific homestead laws in your state contact a local title company or bankruptcy attorney..
Carlos Lee, MBA, is the senior consultant for Asset Protection Consulting Group.Visit apcg.net for more information on how to bulletproof your assets from future lawsuits.
By: Carlos Lee