Both of these questions are tax issues more than legal issues. I asked a very experienced tax CPA. He says that for tax purposes all exempt assets count when you assess a taxpayer’s insolvency. Even if the mortgage lender could not levy upon the owner’s retirement account the value of the account would preclude the owner from claiming insolvency for tax purposes.

 An alternative to the equitable lien for fraudulent conversion of fraud proceeds is the remedy of a constructive trust. Courts may impose a constructive trust on property to achieve fair and equitable relief. Constructive trusts are used to remedy unjust enrichment, fraud, and duress. If a creditor can show that proceeds of civil fraud flowed into a debtor’s homestead the court can impose a constructive trust on the property for the benefit of the defrauded creditor notwithstanding the fact that the debtor did not invest in the homestead with primarily to shield the fraud proceeds.

 In the event North Carolina law applies to determine ownership of the note, what is North Carolina law regarding entireties title to personal property. North Carolina law recognizes tenants by entireties ownership of personal property such as a promissory note.

In Florida personal property owned by a married couple is presumed to be owned by the entireties. The creditor must rebut the presumption. In North Carolina there is no presumption of entireties ownership of personal property. Personal property is not owned by the entireties unless entireties ownership is included in the ownership title. Therefore, under North Carolina law, if applicable, this note would probably not be entireties property whereas in Florida the same note would be presumed to be entireties and protected against the husband’s creditors.  

 The clients beneficial interest in a discretionary spendthrift trust would be protected so long as someone else created the trust for his benefit. The question is whether the trust would be considered a “self settled trust ” when the client’s LLC established the trust, and secondly, would the trust be a valid second member. Technically, this arrangement works because the LLC, not the client/beneficiary, created the trust/second member. However, I think a court might collapse the entire arrangement and consider both the trust and the LLC to be the alter-ego of the client. The issue is whether the court would define the self-settled trust and multi-member LLC literally, or whether the court would look at the substance and equities (smell tests).   

 A discretionary trust provision gives the trustee the discretion to assign and/or distribute trust income to and among trust beneficiaries. There is another Florida statute dealing with a creditor’s right to attack a debtor’s beneficial interest in a discretionary trust. The statute says that a creditor cannot compel a trustee to make discretionary distributions to or for the debtor’s benefit, nor can the creditor attach the debtor’s right to receive future discretionary distributions.  

There is potential confusion for two reasons. First of all, many estate planning trust contain both discretionary distribution provisions and a spendthrift clause. Second, the term “spendthrift trust” is better known and understood than “discretionary trust” so some people use the term spendthrift trust to refer to an “asset protected trust” generally without distinguishing discretionary trustee protections. 

  I don’t think this would work. I see a POD account is similar to a living trust with testamentary (on death) instructions. The owner has right to withdraw and use the money in the account during his lifetime. The owner could empty the account or revoke the account even through the POD instruction is irrevocable (assuming that it could be irrevocable). Because the owner has full rights to the money, his creditors can get the money in the POD account unless the money is otherwise exempt. 

  No way. He has to be here, and then he can assert that he intends to stay permanently. Or, this man could have previously used the Florida condo as a primary home, moved away temporarily, but always intended to sell his Tennessee home and return to Florida- that may work. Merely planning to move to Florida is not sufficient to claim Florida residency, in my opinion. 

 I think that insurance proceeds paid for damage to a homestead represent “homestead equity” and are generally exempt. If the homeowner intends to reinvest the insurance money in a new home then the money is protected in his bank account while he looks for a replacement home for a reasonable time.

If, and when, he abandons the ideal of buying a new home and instead moves into a rental property with a long-term lease I think the money would no longer be exempt under the homestead umbrella. If he rents a space on a short term basis while he searches for a new home to buy then the funds are still exempt- again, for a reasonable time.  

 A judgment has a 20 year life span. It does not last forever. After 20 years a civil judgment is no longer enforceable and the debt is extinguished by time. 

 If the client’s business is sued the judgment creditor could garnish the business bank account and any credit card payments held as part of a reserve. There may be a way for a U.S. creditor to garnish a merchant bank in Estonia, but it cannot be easy. I don’t know if U.S. judgments are valid in Estonia or whether that country permits garnishment of bank funds.  I think it would be difficult (not impossible) for a judgment creditor to make a case that a debtor’s affiliation with a merchant bank offering better financial terms is voidable under fraudulent transfer statutes. 

 The courts reasoned that bank account is located at the branch were the account is opened and maintained. Accounts opened in other states or countries are located outside of Florida regardless of the debtor’s residency and the bank’s branches. Florida courts do not have jurisdiction on banks or accounts outside of Florida. Courts have held that garnishment of a bank account requires jurisdiction on both the debtor and the debtor’s property. If the Florida debtor opened an account outside a Florida a Florida writ of garnishment cannot attach to the account. See, Skulas 2010 WL 1790439; Ellis 594 So. 2d 827; Tueta 176 So 2d 550; 

Second, after you file the exemption form, call the creditor or attorney and discuss your exemption. Most creditor attorneys will voluntarily dissolve a garnishment if you show them proof of a valid exemption. 

The third option, if your asset is not exempt, is to fight the garnishment on procedural grounds. The Florida writ of garnishment laws include many detailed procedural requirements with very strict time requirements. Even the most experienced creditor attorneys often violate one of the technical requirements of a writ of garnishment. If you find and assert a procedural violation you can get a court to dissolve the writ of garnishment.  

 The mortgage company representative said it was his company’s new policy to keep people in their homes and avoid foreclosure. The bank offered to mark the mortgage balance down to fair market value through a permanent mortgage balance reduction. The bank wrote off over $100,000 of mortgage debt as part of the homeowner’s payment reduction. The homeowners have no personal liability to repay the amount of mortgage deduction. 

 Florida law presumes that all assets owned by husband and wife with rights of survivorship (joint tenants with rights of survivorship) are intended to be owned as T by E. Therefore, the T by E designation need not appear on the face of the title (e.g, the deed or bank account) in order to be protected entireties properties.

 I do not believe the SEC could force the sale of a debtor’s Florida homestead, but the SEC could probably place a lien on the property to recover money when the property is sold or refinanced.  Employee pensions and most other retirement is exempt from disgorgement. Other assets are vulnerable. For instance, the SEC can hold debtor’s in contempt for refusal to turn over money held in offshore accounts or offshore entities. 

Tenants by entireties property is not technically an “exemption” similar to exemptions from creditors established by Florida statutes or the Florida Constitution. Florida’s asset protection exemptions require that the debtor be a Florida resident. Entireties protection, not being an exemption per se, does not require that the debtor be a Florida resident. Entireties assets are protected from the creditors of one spouse so long as the asset is located in Florida so that is covered by Florida’s property laws. 

 My answer to the reader’s question is that the Florida securities account would be protected from the creditors of either spouse regardless of whether one, both, or neither of the couple resides in Florida. However, if there is a judgement against the non-Floridian spouse, and the financial institution has an office in the state where the debtor spouse resides,  I believe the creditor could garnish the account in the debtor’s home state. 

 In a recently decided bankruptcy case a debtor’s statement of intentions indicated he wanted to surrender his homestead to the mortgage company. However, the debtor also intended to live in his house until the mortgage lender completed the foreclosure. The trustee objected to the debtor’s plan to continued occupancy during the bankruptcy, and the trustee argued that when the debtor’s stated intention to surrender the property amounted to an abandonment of his homestead protection.