Home Equity Bait

23 Jan 2025 · 1 min

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0:47

In this short informational video, Jerry Taylor warns homeowners that the equity built up in their primary residence can become a target in lawsuits. He argues that typical risk‑mitigation tools—auto insurance, homeowners insurance, and even large umbrella policies—often give a false sense of security because insurers can deny claims in many common situations (e.g., teen drivers under the influence, texting while driving, injuries to tenants in a rental property). Taylor then recommends stronger legal structures, specifically domestic asset protection trusts (DAPTs) and irrevocable trusts, as more reliable ways to shield home‑equity from creditor claims and lawsuit judgments.

Chapters

If you 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.