How to Protect Your Home Equity | Palma Financial Services

Our home is our most valuable asset for most of us, but it can also be one of our most vulnerable assets.

Keep in mind that not only is every individual in a different situation with their assets, family, and types of risks they’re facing, but EVERY STATE is just a little different in the way asset protection applies to a personal residence.

How to Protect Your Home Equity

Here are three possible strategies that could work for you to protect the equity in your home:

1) Maintain Your Company on An Annual Basis

This is the same thing for our businesses or rental properties. Let’s limit the risk of getting sued by a customer, employee, or tenant before stressing about the structure to hold our home. This involves simple company maintenance procedures. There are more cases where the Limited Liability Company (LLC) or corporate structure is “pierced” in a lawsuit, and a plaintiff grabs the owner’s assets. The reason why…owners are not doing their annual maintenance.

2) Umbrella Insurance

Make sure you have all of the appropriate insurance policies in your life, including an Umbrella Policy. Ensure your proper insurance coverage. Any attorney that recommends you rely on legal structures and not buy insurance is taking a severe risk on your behalf. Vise-versa, thinking you can buy Umbrella Insurance and ignore other options, is fooling themselves.

3) Homestead Exemption

Every state has this law on the books. It is a pre-established statutory amount (set by each State’s Legislature) to protect some equity or value in a person’s home from a creditor or bankruptcy. The amount varies from State to State, as do the laws on how to avail oneself of this protection. In some states, residents have to file paperwork within their County to ensure they get it. You don’t write a check to creditors if they come after you in a lawsuit.

All of us need to consider at least the issue of protecting our home and probably take some active steps to protect its equity better.

Your Residence should be protected. Please don’t wait until it’s too late to protect your home equity.

Schedule Your Free Tax Assessment Here.