This may seem like an unlikely combination, life insurance and quit claim deeds, but both of these are questions I couldn't answer on my own during out Tuesday evening Tax Teleconference. So I submitted the questions to my friend and fellow Rich Dad Advisor, Garrett Sutton, esq. Here are the two questions along with his answers.

Q1: Is life insurance protected from creditors and other claims by function of law or do I have to do something special to protect it?

A1: According to Garrett, this varies state by state. He confirmed that one way to absolutely protect it is through an Irrevocable Life Insurance Trust (ILIT). This I had mentioned on Tuesday. An ILIT is a very nice protection as it also can protect the life insurance from estate tax.

Q2: Does it matter whether I get a Quit Claim deed on a house I purchase or should I always get a Warranty Deed.

A2: As I suspected, the Warranty deed is superior to a quit claim deed as it warrants good title to the house. Garrett was surprised that the Title Company would provide title insurance on a quit claim deed. Since the person asking the question did get title insurance, then the Warranty deed would seem to be less important. In the future, I would always recommend a Warranty (or Grant) deed. This provides you with added protection, as you not only have the right to go against your title company if there is a problem with the title, you can also go against the seller.

Great questions and thanks especially to Garrett Sutton for coming through as always. You can learn more about Garrett at http://www.sutlaw.com.

Warmest regards,

Tom