Shopping around for a mortgage quote can….

posted in Mortgage by Admin on May 31st, 2009

Shopping around for a mortgage quote can be a tedious and time consuming process.

Reducing your monthly payment will mean that you can have some spare money for other purposes.

Entity Layering- Layers on the Onion

By Don Burnham

Entity layering is a key concept in risk management. It is like the layers of an onion. The outside of the onion is the toughest layer and there are many layers to the onion. As soon as you peel that first layer back, a chemical reaction begins, because the onion is defending itself and in each layer, the reaction gets a little stronger.

This is a good analogy for asset protection. You want to have layers of protection. Each layer makes it more difficult to penetrate. If you put the right techniques in place, in the proper sequence, you will make it very difficult for a plaintiff to get to your assets.

That means realigning the ownership of how you hold title to reduce your risk. You want to have assets held so that you have some layering between you and the plaintiff.

By realigning the ownership of your assets to reduce your risk and further protect yourself for potential problems, you will to have a much lower stress level and be able to enjoy your wealth as you accumulate it.

Level one is having the right kind of trust. It might be a Living Trust, a Wealth Preservation Trust, the Multi- Generation Dynasty Trust, or a combination.

Limited Partnerships

Level two is the management and control layer. It may be a Limited Partnership or a Limited Liability Limited Partnership. At present, the LLLP has only been adopted in about seven states. But it can be established in any of those seven states and then imported to where you live and it can own your corporation and/or your Limited Liability Company.

Asset Protection

Level three is the operations layer consisting of your corporations and LLCs that are owned by the LLLP. These techniques put layers between a potential plaintiff and you. You want that plaintiff to be two or three layers out, so that when they start trying to peel that onion, they can’t go directly to your bank account. You want them to be forced to go through the layers and you want it to cost them a lot of money.

The Layers In the United States, we have two types of partnerships, several types of trusts, and two types of corporations.

There are basically two types of partnerships:

General partnerships - unlimited liability

Limited partnerships - limited liability

The members of a general partnership are 100% liable. Limited Partnerships, on the other hand, limit the degree of exposure. If you put $100,000 into a Limited Partnership, thats the total risk. You are only risking the amount of investment.

Generally speaking, trusts fall into the category of revocable or irrevocable. The Internal Revenue Code applies to all trusts, according to how theyre used. Typically, you will see trusts used in estate planning and asset protection.

There are two types of companies in the United States:

Corporations

Limited Liability Companies

Corporations have been around a long time. They are perpetual in nature and owned by shareholders. Limited Liability Companies (LLCs) are a form of a hybrid imported into the United States about 20 years ago. The LLC is a popular entity, because it limits liability and has many tax choices.

LLCs - Limited Liability Companies are perfect for real estate investors. The typical sole proprietor who owns property in their own name or does business as (DBA), are the ones who have the most exposure to lawsuits, because they are the easiest targets. They also have the greatest amount of losses and are the target of most tax audits.

Why should we use a company? The financial advantages and tax savings, combined with asset protection putting distance between you and that potential plaintiff - are the primary reasons to use a company.

Corporations - Corporations, as an entity, have been around a long time and are effective when used for the right reasonsusually to operate a service business. However, if you are going to own real estate, using an LLC is a better choice

All corporations are born as a C corporation. A C corporation can be changed to an S corporation. A C corporation can be owned by a Limited Partnership. Subchapter S corporations have the flow-through tax advantages, but they also have severe restrictions in terms of ownership.

The corporate veil is what protects you from lawsuits. However, the veil can be pierced if the corporate rules stipulated by IRS code are not followed. Corporations require a lot of formal procedures and documentation. To protect the corporate veil, you must have and document board meetings. Resolutions must precede actions taken by the corporation.

One way to help protect your corporate veil is by accumulating business credit. You dont just open a business one day and get a $500,000 line of credit the next day. You need discipline and to focus on doing it the right way.

You can get there faster than you think when you set up your business the right way and apply for credit after you get established. The biggest mistake people make in the area of business credit is that they apply for a credit profile with Dunn and Bradstreet too soon.

Before you apply for a credit profile with Dunn and Bradstreet, make sure your business phone is listed in the White Pages in the name of the business, not you individually. You must also register your business license they will check.

Business credit helps separate personal and business credit, so that the company can eventually qualify for its own credit.

Don Burnham is an entrepreneur, author, real estate investor, teacher and speaker. He is CEO of the International Association of Seminar Professionals (IASP) and CEO and co-founder of the Wealth Restoration Institute, LLC, at http://www.weknowthewayback.com

Unable To Get Mortgage Debt Relief? Be Ready For A Lawsuit

By Don Burnham

The United States is home to 94% of all the lawsuits in the world and 75% of the worlds attorneys. Very few of them are willing to help you get mortgage debt relief, or give you free financial advice, but many are willing to come after you for the default judgment..

Once you are served with a lawsuit, the clock starts ticking. You may be served by mail or in person and you have a very limited amount of time to answer the lawsuit. In most instances, the lawsuit will typically overstate the claim. For example, if you were involved in an automobile accident that caused $5,000 of damage to the other car and $5,000 of medical damages and you get sued, it will be for an amount much greater than $10,000.

Theyre going to say things like, I have headaches now and I get cranky with my kids. Youre going to file a claim for much more than the actual damages. If they can also say they suffer from emotional distress, which means more money for them.

In most jurisdictions, you have 20 to 30 days to file your answer has to be before the court. And, it must be in the right format and have substance to it. The discovery phase begins next and is the most expensive phase of a lawsuit. The discovery phase is where:

Depositions are taken under oath

Answers to interrogatories or questions are provided

Copies of documents are provided

Testimony is taken under oath on both sides

Expert witnesses are brought into the process

Then, the plaintiff prepares their case against you. You will spend a lot of money defending yourself if your liability insurance policy includes except or but provisions. If youre in that category, you are on your own, except for some partial coverage.

Youll be faced with expenses and a lot of stress, because the real cost of the lawsuit isnt just the money. Its also the stress you experience during a process, which could last for two or three years.

Alternative Dispute Resolution - A method used to resolve legal complaints is called Alternative Dispute Resolution or ADR. All contracts should include an Alternative Dispute Resolution clause waiving rights to litigate and engaging in an Alternative Dispute Resolution.

Step 1, Conciliation

The first step is called conciliation, where you talk informally and see if you can work out the problem. If that doesnt work out, you agree to enter into mediation where you hire a third party mediator.

The mediator will help both sides sit down and negotiate an arrangement in which both agree. The process is formalized with a written agreement. When the dispute is resolved, both parties are required to perform according to that agreement.

Step 2, Arbitration

If mediation doesnt work, then arbitration is the next step. Arbitration is similar to court system process, except that it is much cheaper and much faster. The American Arbitration Association is a national organization that has arbitrators in every major city in the country.

Arbitration allows you to hire a third party. The third party can be one individual or a panel of third party participants to hear the complaint. Both sides give verbal testimony and present any evidence to the third party.

The rules of evidence in an arbitration setting are more relaxed and less formal than in the courtroom. Arbitration is usually completed within one to two days devoted to a hearing. The results are then usually determined within a few weeks instead of years.

If you have entered into a contract with this method of dispute resolution, you might spend a couple thousand dollars, instead of losing $100,000 in a lawsuit

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