All assets (such as cars, jewelry, and homes) are not treated in the same manner. Some are exempt from attack by future creditors, while others require more protection. For example, your bank account can be more easily seized by creditors than the home you share with your spouse. As a result, it is necessary to consider the difference between exempt and non-exempt property when developing your asset protection plan.
Which Types of Assets Are Typically Exempt from Attack By Future Creditors?
State law governs whether a property is exempt or non-exempt. Some typical examples of exempt property include:
- Public and private retirement benefits
- Household furniture and furnishings
- Personal effects, such as clothing and jewelry
- Disability and health benefits
- Proceeds of life insurance and annuity policies
- Social security benefits
- Tools of a trade or business
Do I Need an Attorney for Assistance with My Assets?
Using the applicable exemptions, you and a knowledgeable attorney can structure your property holdings to turn non-exempt property into exempt property. For example, instead of putting cash into a bank account, you might decide instead to fund a retirement program. Using the allowable exemptions is one of the most cost effective techniques for asset protection; however, exemptions alone are insufficient to protect many of your assets. More sophisticated techniques may be required, which is something that an experienced estate planning attorney can help you with.