Protect Your Real Estate

Executive Summary – Real Estate is not a transportable asset. Ultimately it is under the jurisdiction of the courts where the real estate is located. There are some things that can be done to protect or secure real estate but if a judge or magistrate is convinced that these actions were undertaken to defraud creditors, they can set aside these measures and let the creditors take the real estate through auction or other means. In this regards timing is everything. The longer one waits the harder it is to do. Some of these measures are useful in terms of not being identified as a target for litigation when an asset check is run. The ultimate real estate asset protection move is to liquidate the asset and remove the funds from the jurisdiction, which takes things out of the reach of the courts.

This is not intended to be a how to do it yourself guide to real estate asset protection. It is a thought-provoking look at some of the things that can be done to secure real estate. Do feel free to call our law firm to inquire further as to how we might be able to help you safeguard your real estate assets.

Hiding Real Estate – This is great way to avoid any trouble to start with. You title the real estate to an anonymous corporation in an offshore jurisdiction. This way when an asset check is done your name does not come up as the titleholder of any real estate. You also do not come up as the owner of a corporation since these are anonymous corporations the owner’s names do not appear in any public registry or database. It is best to do this before any claims (lawsuits) against you are filed. If you owned a piece of real estate for many years and then all of a sudden you get sued and then suddenly change the title of your real estate to an offshore structure, it is possibly going to raise red flags if the opposing counsel is smart enough to pick up on it.

If you own a corporation that owns the real estate this could be sticky if under oath you are asked to list your assets. It is sometimes better to use a Panama Foundation for this since under Panama Law no one can possibly own a foundation. Thus the real estate can be donated to a foundation, which means no funds from the sale to account for. Instead you could be getting an annuity for the contribution of the real estate to the Panama Foundation. This could be $300 a month for life. This money could be put onto an anonymous atm card thus not attachable by a financial adversary since it is all paid offshore. If the real estate is not under your name then it does not come up in any asset check and thus you are at less risk for a lawsuit.

Equity Stripping – This is a strategy whereby one encumbers the property to remove the equity thus making the real estate less of a target. This can be done in a number of ways. The most direct way is to have an anonymous offshore corporation place a loan on the real estate. It is best to have an escrow and record the loan. If possible actually fund the loan and make payments to the anonymous corporation. Payments can be quarterly or yearly. Payments can be interest only with a balloon payment at the end of the term. The loan can be renegotiated thus avoiding the balloon payment. One should remove all or most of the equity going to a minimum of an 80% debt to value ratio. If the property is worth $100,000 have the loan go up to at least $80,000. If there is a first position loan, create a second position loan (aka second mortgage). One has to watch this carefully. If there is any trails to make someone think you created a loan to equity strip the property the loan will be set aside as a sham or straw man loan. You could also be asked in court what you did with the loan proceeds. The loan proceeds should not be in a liquid position even in an offshore bank. The court could order you to repatriate the funds to your country where the court could seize control of them and turn them over to the creditor or hold the funds pending an outcome of a trial. If the funds are invested in something not liquid or transportable out of the jurisdiction of the court then you are in a much better position.

Often your goal should be to make it very hard, expensive and burdensome for the opposing counsel to get at your assets. This positions you to negotiate your way out of a bad situation inexpensively. If you and your assets are both out of the jurisdiction where the trouble is then you are in a very advantageous position to negotiate a sweet deal. Unfortunately this is not possible for many people.

Asset Trades – You can trade your real estate for another asset like boat, plane or piece of real estate located offshore. If the other party paid fair consideration for the property then it is unlikely a court would set this aside unless it could be shown that you had less than an arms length relationship with the other party. So you give the other party title to your property and get in return title to a piece of real estate in another country that is not under the jurisdiction of the court where you reside. Thus you could disclose the transaction completely with no deception and the court could not do much about it. They could order you to transfer title to the creditor but by then the property could be encumbered by loans that require payments. In other words the creditor would have to assume the loans. The loans can have a clause preventing transfer of title without payment of the loans. It could say the new owner has to qualify for the loans. You could also then sell that property and the sale proceeds could be in another piece of property and we can keep entangling the web as necessary. There are a lot of things that can be done in the offshore world that cannot be done in the privacy invasive police states.

Summary – There are these strategies plus others that we are not going to list on our website for the entire world to see. Your best protection is to have the real estate titled to an anonymous offshore corporation or foundation before the problems begin. Next best strategy is to liquidate the real estate that the other side knows about. New real estate could be acquired in the name of an anonymous offshore structure in any country including your residence country.

Conventional lenders are generally not fond of lending when an anonymous corporation or foundation is the titleholder except in a few offshore jurisdictions. So if you need conventional financing your strategies will be restricted to varying degrees depending on the terms of your loan. The important point is to protect the real estate before the lawsuits start. If you feel we can help please inquire.

Relevant Thought Provoking Links

Asset Protection in the USA

Guatemala Trust Agreement Banking

Panama Foundation or Trust?

Bearer Share Corporation

Anonymous Real Estate