How to Protect Your Personal Residence - Gary Mialocq & Associates

Protecting Your Personal Residence

There are more than 80 million lawsuits filed in America every year. Property owners, landlords and real estate investors are susceptible to liability.

Are you a target?

Are your assets easy to locate?

Is your real estate in your name?

Why would you expose your most valuable assets to public scrutiny?

Anyone can enter the county recorder's office and find the owner of any property. Real estate records are computerized, so your real estate holdings can be located at a moment's notice, If there are mortgages on your property, they will also be recorded and state the amount of the original principal balance and the date the mortgage payments began. Anyone can figure out your mortgage balance and subtract that amount from the market value of your house. They know how much equity you have and whether you are a suitable candidate for a lawsuit. A contingency-fee lawyer charges a percentage of whatever he collects. Most will refuse to accept a case unless the defendant has means. If you have no real estate in your name, chances are they won't take the case. Having the appearance of owning nothing is the best lawsuit-repellent you can have, and that is provided by the privacy features of a land trust.

The first thing you want to do before you invest in income property is to protect YOUR OWN HOME against liens and encumbrances including protection from creditor judgments, tax liens, and probate and to keep the property hidden from actions in bankruptcy, marital dispute, and lawsuits. This can be done easily and inexpensively. Here's how: You place your property into a land trust and name a non-profit corporate Trustee to take title. You now own 100% of the land trust (personal property) and your Trustee owns the real property. This is very important because your asset is no longer governed by mortgage law, but now by the Uniform Commercial Code (UCC) Article 9.

The paperwork is complex, but the process is simple and the benefits are unmatched and well worth the effort. You can set up the trust yourself by going to the North American Realty Services website and entering the requested data and payment information. Unfortunately, many people are not confident about doing it themselves, aren't sure how to select a trustee or whether to use an attorney, etc.

At your option, I will:

Gather, review and submit all documents to NARS for trust preparation;
Submit all documents for review by NARS' accounting and legal departments;
Contract with Trustee, Equity Holding Corp. to take title;
Forward all necessary trust and related documents to you for signing;
Furnish you with the Deed to record in your County.
Be available to consult, strategize and answer questions for a period of one year.

It's that easy. My service to you is Free. You pay only $324 to NARS for the Trust, plus $144 ($12 per month) for your non-profit Corporate Trustee's annual fee! If you want me to oversee the transaction and participate with you in a joint venture, my fee is a 10% beneficiary interest.

Gary Mialocq, Ph.D.
NARS Land Trust Consultant
800-828-0684

NARS is not a law firm, accountancy or real estate brokerage.
All inquiring parties are encouraged to seek independent legal, accounting,
and real estate agency advice and representation.

ASSET PROTECTION:

Regarding ownership in the land trust, one’s beneficiary interest provides a high degree of protection -- though not absolute insurance -- against a judgment creditor’s partitioning of one party’s interest from that of another, thereby forcing the sale of part of the property or liquidating it and dividing the proceeds. To best protect, it is prudent and highly advisable for land trust participants to hold their respective beneficiary interests in a Limited Liability entity such as a Limited Partnership or a Limited Liability Company (LLC). In so doing, each beneficiary can then be free of concern about the accidental or untoward misdeeds of the other (i.e., dealings that could otherwise easily involve the property’s title by either party’s creditor’s claims, tax liens, bankruptcy, legal actions in marital disputes, probate, etc.).

“Since the interest of the beneficiaries under a land trust is personal property, and since the trust agreement expressly precludes the vesting of any legal or equitable right in a beneficiary, partition is not available.”

Henry W. Kenoe, Keno on Land Trust, IICLE, p 3-012 Sec. 3-9 (1989)
CA. Civ. Code §872.210
CA Probate Code §50
CA. Probate Code §133(i)(c)
CA. Civil Code §955.1
Wile, “Judicial Assistance in the Administration of California Trusts,” 1`4 Stan. L.Rev. 231, 245-250 (1962)
CA. Estate Administration, §§33.11 to 33.35 (Cont. Ed. of the Bar, 1959)
Aronson v. Olsen, 348 Ill. 26, 29, 180 N.E. 565, 566 (1932); Breen v. Breen, 411 Ill. 206, 210-12, (1952).
Probate Code §§11600 et. seq. & 2463;

A creditor may reach the corpus of a land trust, unless the trust is irrevocable, or there would be more than one unrelated beneficiary (as with the model of the NARS Equity Holding Trust System™). This concept appears to be based upon the idea that a co-beneficiary in a land trust can be seen as a “partner,” and a claim or charging order effected against a co-beneficiary would be impossible without a dissolution of the entity (the trust), and since an unrelated co-beneficiary is not responsible for the actions of the other: such dissolution would not be allowed.

Henry H. Keno on Land Trusts, IICLE, Springfield, Illinois (1989)
Smith v. B of A; Houghton v. Pacific Southwest Trust and Savings Bank: 111 CA 509, 295 p. 1079,
The CA. Code of Civil Procedures §697.510]