Asset protection laws in California

Asset Protection Laws in California

Bankruptcy ranks among everyone’s worst fears. Losing all of your assets and savings is a worst-case scenario, but it needn’t be yours. Varying by state, asset protection laws can help protect certain types of assets from liquidation or seizure during bankruptcy. However, in order to ensure that your assets are protected to the maximum extent of the law, you need plenty of foresight and expert guidance.

In the state of California, you can choose one of two options for holding various categories of assets eligible for protection. Both options cover the dwelling in which you reside, your pension or retirement benefits, insurance benefits, personal property, and equipment relating to your occupation, although the dollar limits differ in some cases.

Option One makes provisions to include business property and wages paid within 90 days of filing, while Option Two includes alimony and child support among the assets eligible for exemption. Both options cover public benefits, the types of which differ from option to option.

To maximize your protection, you will need to determine which option best matches your own assets before moving forward. Asset protection is a complex undertaking, one that requires extensive background knowledge and a comprehensive understanding of asset protection laws. For that reason, an experienced legal advisor or attorney who understands California law can be a great resource as you consider ways to protect your legacy.

A Custom Strategy

With the guidance of a skilled attorney, you can create a personalized asset protection strategy so that even in the case of bankruptcy, your assets will remain safe and secure. According to California asset protection laws, the asset categories eligible for protection are as follows:

  • Homestead: Any real property you own and occupy, including mobile home, boat or apartment, up to a certain dollar amount. The specific value is determined by your age and the number of dependents you have.
  • Pensions and retirement benefits: Funds exempt for county employees or public servants. IRA exemptions for conventional, Roth, SEP and SIMPLE plans up to $1,250,000 per person.
  • Insurance: Disability or health benefits.
  • Personal property: Encompasses almost any personal property, including funds recovered in personal injury lawsuits, crops and livestock. Monetary limits and stipulations apply to certain items and sub-categories.
  • Tools of trade: Any equipment necessary to carry out a trade.
  • Miscellaneous: Business partnership property and business/professional licenses except liquor license, alimony and child support (depending on the option).
  • Wages: Public employees’ vacation credits and limited wages paid post-bankruptcy filing.
  • Public benefits: Unemployment, worker’s compensation, veteran’s benefits, social security, and student financial aid.
  • Wild card: A fixed monetary amount that may be assigned to any property.

While this list represents the main categories of assets eligible for exemption, there are additional assets within each category that are not included above. In addition, many of the aforementioned assets are subject to dollar limits and additional requirements.

Easier management

As evident from the information stated above, asset protection management can be a complicated and detailed process and is best accomplished with the support of a legal expert. Jeffrey M. Verdon and associates understand the importance of establishing an asset protection trust so that your assets will always be secure. Faithfully serving Southern California for many years, Jeffrey M. Verdon Law Group works tirelessly for their clients’ best interests.

If you want peace of mind about your financial future, schedule a consultation with Jeffrey M. Verdon Law Group today!

Posted in Updates.