How to protect the note - Posted by David Milroy

import · July 25, 2002, 3:38pm

Posted by jeff on August 03, 2002 at 16:42:04:

looks like a personal property trust may be in order if you desire secrecy from wondering eyes. i have never done a personal property trust but according to bronchick’s course your note is an asset. this asset can be transferred to the trust by doing an assignment and bill of sale. this seperates the note from your LLC by hiding its existence when they do a search for your assets. you can put every note in its own trust with the beneficiary benig a seperate revocable, living trust created by the LLC in which it is the beneficieary. this stacking method should make it real darn difficult for anyone to do a simple search for your assets and come up with anything at all. even if one note trust is sniffed out then a judgement can be placed on that individual trust but all your others are still free and clear.

the above method puts yuor personal name way down the list behind the several trust and then behind the LLC. you have multiple layers of protection from lawsuit happy attorneys.

import · July 25, 2002, 3:38pm

How to protect the note - Posted by David Milroy

Posted by David Milroy on July 25, 2002 at 15:38:13:

I haven’t seen an answer to this on the posts. I have created an LLC to deal through to protect my personal assets. However, when selling a mobile home and creating a note, who is the beneficiary of the note. Is the note to myself, or to the LLC. I see a problem having the LLC hold the note as over time the value of notes held by the LLC might make it a nice target. However, if I hold it personally, does that make me a nice target?

import · July 26, 2002, 1:49pm

separate entities - Posted by Steve W (WA)

Posted by Steve W (WA) on July 26, 2002 at 13:49:32:

This has been discussed in a general sense - the entity(ies) that has more contact with the public (higher risk) should hold few assets of value - the notes should be held by a separate entity, as there is really no public dealings once the note is done, other than T/Bs. So if somebody trips on your LLC’s MH steps, they can sue and take away only what that LLC owns - a MH or two. The notes are held in a separate entity. Since no one will trip over the note, there is little risk there.

The opinion stated is my own, and is in no way to be construed as legal advice. For God’s sake, my kids won’t take my advice, so why should I expect anyone else to?

Good Luck - this is one I am struggling with for clarification too.

import · July 25, 2002, 8:31pm

Re: How to protect the note - Posted by Tony-VA

Posted by Tony-VA on July 25, 2002 at 20:31:31:

Chuck has steered away from this one, therefore I guess I am not in my right mind.

David, your question answers itself. You formed an LLC to protect YOUR Assets. Yes, your LLC will over time begin to grow assets.

But if you do the deal in your name, you too will grow assets and now you have ALL of YOUR assets at risk instead of just notes.

You would have just defeated the whole reason for forming the LLC to begin with.

As to value building up in your LLC. The street value of a mobile home note is no where near the face value.

Business entities are for doing business. There are a myriad of ways to protect the assets contained in a business.

I recommend Ernest Tew’s “Asset Protection” book available at his site for something like $40 or $50.

Seek Hyre’s advice as I am not an attorney but step away from the forest for a moment and you may see that path right there in your own question.

At times we get caught up in analyzing every possible pitfall and then make worse decisions.

Tony-VA

import · July 25, 2002, 4:36pm

Re: How to protect the note - Posted by Karl (Oh)

Posted by Karl (Oh) on July 25, 2002 at 16:36:12:

Ask this question over on the legal forum. John Hyre is the attorney who hosts that group, and he does mobile home deals.

Karl Kleiner