Yesterday, the news media in Chicago, Illinois published information about the Cook County Board President Todd Stroger and his federal tax lien. A federal tax lien is a notice by the IRS, which means that a person, business, or organization owes the IRS for back owed taxes. Why is this important? This is important because the IRS can force Todd Stroger and his wife to pay his unpaid taxes or foreclose his house. Thus, a notice of federal tax lien is an scary notice to receive. This blog is not about Todd Stroger and whether he is a bad guy or woman or whether a good politician. In Cook County, Todd Stroger has people that love him and hate him.
This blog is about educating the public about the need for Asset Protection. Asset Protection is about structuring your assets prior to a claim or lawsuit arising and placing your assets beyond the reach of creditors such as medical bills, IRS tax debts, partnership disputes, and medical bills/creditors. In Todd Stroger's example, facing the prospect of having your house foreclosed if you do not pay the IRS is a scary proposition. It is scary because the IRS is a creditor you do not want against you. If Todd Stroger had his assets such as his home properly protected, the IRS or any creditor would not be in a position to foreclose his house. How was Todd Stroger's house titled? I am assuming that Todd Stroger and his wife owned their house jointly as joint tenants, which means that if one spouse deceases, than the other spouse inherits the house. The disadvantage with joint tenancy is one of the spouse's creditors can force a sale of their house when a judgment has been entered against them. Thus, in our example, the IRS can foreclose on the Stroger's house despite being current with his current mortgage company.
How Should You Structure Your Property?
Tenancy by Entirety is a way of owning property with a husband and wife. With tenancy by entirety, you and your wife own your personal residence but a judgment by the husband or wife does not attach to the property. Thus, the IRS could not force a sale of the Stroger's house. Tenancy by Entirety is a way in State of Illinois of owning property, which is exempt from creditors such as the IRS, credit card companies, hospital companies, and other creditors.
By all means, I strongly recommend that people pay their taxes on time and be good citizens. Unfortunately in life, bad things happen to people. In case of these bad things, it is better to be properly protected from lawsuits and creditors.
A better way to own your personal residence is in a Private Land Trust. With a Private Land Trust, one still is the beneficiary of their house but it appears that a Title Insurance Company is the owner. Why is this important? Privacy is a major asset protection tool. In a Private Land Trust, the only people that know who owns your home is the Private Land Trust Company. Simply put, it is easy to find out that you own your home, but the real power of a Private Land Trust is that judgments and liens do not attach to Private Land Trusts. Thus, you can get a judgment in your name and either not pay the judgment (judgment proof) or negotiate a favorable settlement with the creditor and pay a low percentage of the debt due to it being doubtful as to their ability to collect on the judgment.
Sean Robertson, Esq. is an Asset Protection Attorney concentrating in Wills & Trusts, Asset Protection, Elder law, and Probate & Guardianship law. Sean Robertson may be reached at 312-498-6080 or RobertsonLawGroup@gmail.com.
Robertson Law Group, LLC
9923 S. Ridgeland Avenue, Suite 99
Chicago Ridge, Il 60415
Serving Cook County, DuPage, & Will Counties