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72t, semi-re, asset protection, save me from MIL
Old 07-16-2007, 06:19 PM   #1
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72t, semi-re, asset protection, save me from MIL

Sorry, rather than spamming the board, I thought maybe I could just post everything in one thread.

First, I realized something today. Our living expenses, excluding our house, are $24k a year ($48k including those expenses). That could move FIRE way closer.

Also, in addition to my job, I work part time as a contract programmer. When I'm actually trying to get work, I average about 25 hours a week at 65 an hour. After taxes and excluding the house that easily covers our living needs.

Since we're going to live like hippies out in the woods when we RE, I expect our living expenses to adjust accordingly (less on food but lots more on medical insurance)

72t / semi-RE:
So, first question. Let's say I FIRE when I hit my NW number. Can I 72t with the required minimum distributions and still work part-time? I'd just funnel extra money into other investments when I had a surplus to cover when the side work wasn't there.

save me from MIL:
Next question, my wife is worried about her mom. Simply put, she's worried that mom will secure financing using our credit (after all, she knows my wife's SSN, etc). Is there any reasonable way that we can go about ensuring that we're reasonably protected? Some sort of double-secret probation to make it impossible to secure financing.

asset protection:
My wife worried about a lot of things... most recently it's being sued over whatever. We've got great auto/homeowners insurance and an umbrella policy to round it out (plus I'll pick up general liability insurance for my side work this year I think). But, where should I at least start / who should I turn to for advice on ways to shield our retirement assets further? I'm not looking for legal advice, just who we should start with.
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Old 07-16-2007, 06:25 PM   #2
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72t / semi-RE:
- Yes you can do the 72T thing and continue to work.

save me from MIL:
- Put a long term fraud alert on your credit report.

asset protection:
- In case you didn't already know.

IRA assets are shielded to at least $1MM, perhaps more depending on state law. 401k assets and rollover IRA assets have unlimited liability protection.

Insurance and clean living will serve you well from lawsuits. However you can never have enough insurance - just in case.

If you really want to go whole hog on the liability shield thing then look into asset protection trusts, Nevada corporate trusts, and offshore trusts. You'll need a really good attorney to walk you through all of that though.
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Old 07-16-2007, 07:57 PM   #3
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If you're worried about unauthorized credit cards, have the credit bureaus LOCK your credit report. Then no new accounts can be added until you specifically authorize an unlock.

Bit of a pain in the butt when you get a car loan or open a new credit account, but if you're seriously concerned...its the way to go.
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Old 07-16-2007, 09:16 PM   #4
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MasterBlaster, thanks for the info!

I, frankly, was confused by what I found regarding IRA shielding. Some legal sites indicated that IRAs weren't necessarily safe. Others indicated that they were very naked in California and extremely safe in Washington, Arizona and Nevada with other states falling in between. however, it sounded like a 401(k) was always shielded.. but, I'm lucky to make it 4 years with an employer and I hate leaving my money behind (although, the current one is pretty sweet, that might work).

We keep our nose clean, but my wife has anxiety disorder (brought on by a severe bought of overworking) and worries about things you and I probably wouldn't. I appreciate the thought on the trusts but that does sound both tricky and geared at someone I'm not ;-)

CFB, I'm on it! thanks!

To tie in the worry, a friend of the family is considering filing bankruptcy because his parents took out a car loan in his name and then defaulted on it. He doesn't want to report it to the police because his mom is a junkie with a prior and would do time (glad I'm not him!). I told my parents to make sure that he understands that he's at greater risk after he files as there are plenty of institutions willing to loan high rate credit to people who have no protection.

My MIL just called this morning to inform my DW that she's suing my FIL because 'it takes too long for his alimony checks to clear'. This would be the same woman that refuses to let him direct deposit because she thinks he'll be able to steal her information... sigh. While married, she managed to trash his credit, burn through $40k of his inheritance in less than six months, and steal my wife's tution tax rebate money. Oh, and she's closing the account that he's paying money into because of the whole thing... I guess she thinks this will all help her case in court somehow (she's crazy)

Since my FIL now lives out of state and is actually happy, I think she's pursuing this... however, I think she doesn't realize that if FIL doesn't want to go back to the state, he can just stop paying her and not worry about it (we're talking alimony here, the kids were long moved out when the divorce happened).

No way in hell I want that woman near my wife's maxed out credit score.

Whew.. sorry, guess there was a lot of built-up angst there from today that just had to come out.

In conclusion, sometimes I really hate people.
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Old 07-16-2007, 09:24 PM   #5
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wow what story.

Note to self, before marrying run a background check on the prospective mother in law.
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Old 07-16-2007, 09:49 PM   #6
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Because your wife is worried about her mom the two of you should engage an attorney to build very high fences to secure your financial future.

There comes a time for tough love. Seek a mental health counselor who can help family members accept the fact that protecting a loved one from distructive behavior is doing the loved one no favor.
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Old 07-16-2007, 10:28 PM   #7
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I am not sure if that LOCK thing is available nationwide...isnt that a CA thing....anyway, you could get credit monitoring service....I like american express's service....that way you could monitor for new accounts or changes of address...or just pull your free credit report every few months to check...
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Old 07-16-2007, 11:40 PM   #8
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Originally Posted by Brat View Post
Because your wife is worried about her mom the two of you should engage an attorney to build very high fences to secure your financial future.

There comes a time for tough love. Seek a mental health counselor who can help family members accept the fact that protecting a loved one from distructive behavior is doing the loved one no favor.
It probably doesn't help that I intermixed two stories. We're not doing anything for my MIL; she's pretty much estranged herself from my wife and SIL. I've told my wife to leave the door open for reconciliation in the future, but we both agree that would take MIL actually realizing that she is responsible for her own life.

What sort of fences do you have in mind regarding future finances? At this point, all of our accounts have named beneficiaries and she's not one of them. So, no benefit in her offing either of us.

The main issue is that, in my mind, she's perfectly capable of rationalizing some reason to use our credit to finance her lifestyle. And, of course, she's got all of my wife's personal information.

I guess the true test of feelings and family ties will be if it ever comes time to press charges for identity theft.
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Old 07-17-2007, 03:56 AM   #9
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Originally Posted by cute fuzzy bunny View Post
If you're worried about unauthorized credit cards, have the credit bureaus LOCK your credit report. Then no new accounts can be added until you specifically authorize an unlock.

Bit of a pain in the butt when you get a car loan or open a new credit account, but if you're seriously concerned...its the way to go.

I checked into this a while ago... Unless something has changed what I am stating should still be accurate (things are changing fairly rapidly).

I have been notified by several companies that personal data has been stolen. I put a rider on my homeowners policy for fraud and identity theft to cover the cost of fixing it if it happens. The rider will pay about $15k in legal fees and for services to get the damage undone. My understanding is that if you are the victim of sweeping fraud from identity theft, one may need to hire and attorney to get their name and identity back and trusted again! Note, it does not pay for the fraud itself. That is up to you being vigilant and acting within the guidelines of the laws and regs...


CFB- It is a good idea! It is also known as a "Freeze". But being able to do this depends on the state in which you reside. California is aggressive about consumer protection. Other states lag behind. Plus to add insult to injury, some of the credit bureau have turned this in to a way to charge consumers a yearly fee to use this option.

I think the Credit Bureaus will provide more aggressive measures to people in any state, but only after they have been that actual victim of Fraud (not before). You can protect yourself after you have been victimized!

Webzter - I saw a statistic recently that identity theft is often perpetrated by a family member or friend. It is a crime of opportunity. Family members often have easy access to personal information. It is a sad fact. People are often embarrassed to report it or fear that the perpetrator will go to jail... so they just lose the money. Think about it... a mother would be reluctant to prosecute Junior for stealing $200k.


The other opportunistic approach is to steal the information electronically. The electronic approach is growing geometrically.
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Old 07-17-2007, 09:35 AM   #10
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Minnesota currently doesn't allow credit freezes, from what I've googled.

We've had ours frozen for several years now. It would cost us some money ($10 per agency) to unfreeze it for a loan app or new credit card, but we've never needed to do that.
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Old 07-17-2007, 11:55 AM   #11
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Move to california. Get better credit protection AND more distance between you and the MIL!

Better still, move to Texas!
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Old 07-17-2007, 08:18 PM   #12
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Webzter - I saw a statistic recently that identity theft is often perpetrated by a family member or friend. It is a crime of opportunity. Family members often have easy access to personal information. It is a sad fact. People are often embarrassed to report it or fear that the perpetrator will go to jail... so they just lose the money. Think about it... a mother would be reluctant to prosecute Junior for stealing $200k.
My MIL had her identity stolen by her daughter (credit card taken out in her name). Unbelievable what family can do to each other.
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