My daughter works out of her home for a mortgage company over the internet. She has a sixteen year old autistic daughter who is having problems with bullying at school and, considering where she lives, both of them are afraid for their health and security. Her home is worth much less than she owns. She has around $40,000 in savings and IRAs. Can she incorporate and have the home she is in be part of the corporation, separate from her savings and IRAs? If she somehow loses her home, can incorporating somehow save what savings she has so she has something to start with somewhere else?
2 Answers from Attorneys
Your daughter needs to see a bankruptcy lawyer to devise a strategy. The strategy you are hinting at seems half-cocked. Creating a corporation is probably not an effective strategy. Utilizing the exemption which may be available for IRAs should be considered. Note that under Michigan law, only one IRA is exempt.
Your daughter's plan to conceal property by conveying it to a corporation invites accusations from the Trustee as a fraudulent conveyance. Bankruptcy planning is a risky endeavor and should not be engaged upon without an experienced attorney.
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