Home equity

18 Dec 2023 · 1 min

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In this concise advisory video, Jerry Taylor warns homeowners that the equity built in their primary residence is often their largest asset and therefore a prime target for lawsuits. He explains that while many people rely on auto, homeowners, and umbrella insurance for protection, these policies frequently fail to cover claims arising from situations such as teen drivers involved in drug‑ or alcohol‑related accidents, texting‑while‑driving incidents that may be deemed criminal, or injuries to tenants in a rental property owned by the homeowner. Taylor emphasizes that insurers are quick to deny claims, leaving the homeowner’s equity exposed. To achieve robust protection, he recommends establishing a domestic asset protection trust (DAPT) or an irrevocable trust, which can shield the home’s equity from creditor claims and legal judgments.

Chapters

If you've built up considerable equity in your home, you need to consider the fact that you may be setting yourself up for a lawsuit. For many people, the equity in their home is the biggest asset they will have. So to protect that asset, most people get auto insurance, homeowners insurance, big umbrella policies, right? And all of that insurance lulls you into a sense of security that your home is protected. Unfortunately, that is often not the case. Consider these situations where your insurance will not help you. Your teenager gets into a serious accident where there's drugs and alcohol involved. Your insurance company denies the claim. You had an accident where you were texting and driving. In many states, that's criminal conduct. A rental property tenant on a home in your name gets injured, and on and on. And keep in mind, the first thing an insurance company is going to try to do is deny your claim. A domestic asset protection trust or an irrevocable trust will provide you solid protection.