The Dual Option Multi-Party Asset Retention Trust

Many say Title Holding Trusts offer little or no asset protection whatsoever. However over the last few months I’ve developed a product that is a hybrid of a Title Holding Trust (T.H.T.) and an Option Agreement. I call it a Dual Option Multi-Party Asset Retention Trust or simply a “D.O.M.P.A.R.T. ”.





This is how it works!

.



Let’s suppose you currently hold title to real estate in your name.





EXAMPLE-1:





“PAUL JOHNSON a single man as his sole and separate property”





Then you subsequently decide to enter into an agreement whereby you as prospective seller give a prospective buyer two options (“dual options”), an option to buy 100% beneficial interest in and to the Title Holding Trust (T.H.T.) which you plan to create and transfer your real estate into, sometime in the near future:





EXAMPLE-2:





“For and in consideration of an (“Option Fee”) receipt of which is hereby acknowledged, paid to myself PAUL JOHNSON (“Seller”), from CHARLES DRAKE (“Buyer”), I PAUL JOHNSON do hereby grant to CHARLES DRAKE the exclusive right and Option to purchase 100% beneficial interest in and to the Title Holding Trust (T.H.T.) which I PAUL JOHNSON plan to create and transfer my real estate into, sometime in the near future.”





and secondly, an option to buy the real property itself.





EXAMPLE-3:





“For and in consideration of the (“Option Fee”) receipt of which is hereby acknowledged, paid to myself PAUL JOHNSON (“Seller”), from CHARLES DRAKE (“Buyer”), I PAUL JOHNSON do hereby grant to CHARLES DRAKE the exclusive right and Option to purchase the real property, that which I Paul Johnson currently hold title to described as Lot, Block, Tract etc……….”

Next let’s say you agreed by written contract to give the prospective (“Buyer”) CHARLES DRAKE, the right to request the creation, execution and recordation of a lien in the form of a Performance Trust Deed, upon 100% beneficial interest in and to your Title Holding Trust (T.H.T.) even though said“ Title Holding Trust (T.H.T.)” is not yet in existence. In that case upon CHARLES DRAKE (“Buyer”) exercising said rights, the newly created lien would not only attach 100% beneficial interest in and to the Title Holding Trust (T.H.T.) the moment you PAUL JOHNSON (“Seller”) acquires beneficial interest in it; to take immediate effect as security for the performance of future obligations between both parties; it would also create a lien upon the title to the real estate itself as security for the performance of obligations presently in existence.





EXAMPLE-4:





“For and in consideration of the ("Option Fee") receipt of which is hereby acknowledged, paid to myself PAUL JOHNSON (“Seller”) from CHARLES DRAKE (“Buyer”), and pursuant California Civil Code Section 2883(a) which reads, “An agreement may be made to create a lien upon property not yet acquired by the party agreeing to give the lien, or not yet in existence. In that case the lien agreed for attaches from the time when the party agreeing to give it acquires an interest in the thing, to the extent of such interest” and California Civil Code Section 2884 which reads, “A lien may be created by contract, to take immediate effect, as security for the performance of obligations not then in existence”; I PAUL JOHNSON as (“the party agreeing to give the lien”) hereby offer to CHARLES DRAKE the exclusive right and CHARLES DRAKE hereby accepts and exercises said exclusive right to request the creation of a lien in the form of a Performance Trust Deed upon 100% beneficial interest in and to the Title Holding Trust (T.H.T.) which is property not yet acquired by myself PAUL JOHNSON or not yet in existence, by instructing myself PAUL JOHNSON to make, execute and record in the county public land records where my real estate which is the “Corpus of the Trust” is located, a “Performance Trust Deed”. Said “Performance Trust Deed” is intended to create a $500,000.00 lien upon 100% beneficial interest in and to the Title Holding Trust (T.H.T.), even though said Title Holding Trust (T.H.T.) is not yet in existence, the moment I PAUL JOHNSON acquires beneficial interest in it, to take immediate effect as security for the performance of future obligations between both parties; it will also create a lien upon the “Corpus of the Trust” which is the title to the real estate itself as security for the performance of obligations presently in existence, all being for the benefit of CHARLES DRAKE.”





EXAMPLE-5:





“ An obligation not yet in existence might be your obligation to turnover; whatever keys you (PAUL JOHNSON) may have in your possession to the real estate, to CHARLES DRAKE at the close of escrow, in the event CHARLES DRAKE exercises either option.”





The Dual Option Multi-Party Asset Retention Trust or simply the“D.O.M.P.A.R.T.” makes it virtually impossible for a judgment creditor to take ownership of or interest in or attach to either property; the real estate (real property) or 100% beneficial interest in and to the Title Holding Trust (T.H.T.) (personal property) without causing a breach to the option agreement.





Are you convinced?





EXAMPLE-6:





“Let’s suppose down the road you lose a lawsuit and some Judge orders 100% beneficial interest in and to your trust turned over to your new judgment creditor in order to satisfy his/her/their claim. In that case the judgment creditor would acquire said beneficial interest subject-to CHARLES DRAKE’S superior $500,000.00 lien, causing you PAUL JOHNSON not to be able to direct the trustee of your trust to transfer that beneficial interest to CHARLES DRAKE, if and when CHARLES DRAKE decides to exercise option number one; his option to purchase 100% beneficial interest in and to your trust, thereby causing you PAUL JOHNSON to breach the contract itself.”





Need I say more?





EXAMPLE-7:





“Let’s suppose your ex-spouse decides to collect delinquent alimony by convincing some Judge to order the local sheriff to seize and sell your real estate for his or her benefit, thereby causing a material breach of the expressed and or implied covenant of marketable title established between you PAUL JOHNSON and CHARLES DRAKE. As you can plainly see such an order would again disable you PAUL JOHNSON from performing obligations created by contract; hence from being able to transfer title to the real estate to CHARLES DRAKE, if and when CHARLES DRAKE decides to exercise option number two; his option to purchase the real estate.





In either case the beneficiary of the Performance Trust Deed (“CHARLES DRAKE”) or his successor and or assigns (this could be you, your former trustee or another entity you control) could seek remedy by instituting a non-reinstatable, non-defendable against, non-monetary, non-judicial foreclosure of his/her/their beneficial interest in and to said Performance Trust Deed in lieu of specific performance of the breached contract and or agreement; thereby wiping the judgment creditor’s, ex-spouse’s or any other third party’s newly acquired interest off title. The end result………… you PAUL JOHNSON (or another entity you control) retain clear and marketable title in fee simple ownership.