Is it safer to keep investment accounts in a state other than where you reside?
That can be a good idea for this reason. To enforce their judgment against
your assets, your creditor must obtain a judgment in the state where your
assets are located. When your assets are located in another state, your
creditor must obtain a judgment from that state to seize those assets.
Courts in one state cannot seize property in another state. Relocating
your liquid assets to other states can thus delay or frustrate a creditor
attempting collection. But, obviously, this is seldom a good long-term
strategy – though it can delay seizure of your investments until
you develop a more formidable plan. In any event, you want to title these
accounts to a protective entity – such as an FLP or LLC in another
state. Also, for maximum safety, keep these accounts in banks or brokerage
firms whose offices are outside of your own state. These steps are unnecessary
in most situations but we have recommended these strategies in some instances.