Asset Protection

Types Of Assets

Some types of assets are at more risk for attack by creditors than others. Here you will find a list of assets that are exempt from these attacks.

Not all types of assets need protection from those who may want to get their hands on your assets. Some types of assets aren’t as easily accessible as others. Below is a list of types of assets that are often harder to attack than others. The laws on which assets are protected, and how much of those assets, varies from state to state so it is important to consult with an estate planning attorney to find out which assets are safe in your state.

• Life insurance—some life insurance plans are exempt from attack. These are not necessarily as safe once they have been paid to beneficiaries, though, and it is important to learn whether your life insurance is protected.

• Retirement and Disability—these types of assets are not usually ones that need to be protected. There are specific types of retirement accounts that are considered exempt. Employee Retirement Income and Security Act (ERISA), a federal regulation that makes certain retirement plans exempt from liability, provides protection in this manner. To be sure that your retirement account is safe from attack, it needs to be an ERISA account. This also applies to both forms of social security.

• Personal items—this includes clothes, household furniture, pictures on the wall, etc. (Unless, of course, the television in your living room is still not paid for and that is the creditor who wants it back.) Many states put a limit on the amount of personal items that are exempt. You should consult with an attorney to find out what the limits are in your state.

• Business tools—depending on what type of business you have and how it is operated, your business tools may be exempt from attack.

The above items are just the most common and typical types of assets that are often considered exempt from liability. Laws vary from state to state, so there may be regulations for the above exempt items, and your state may have other items that are considered exempt. Before creating your asset protection plan, you should find out which types of assets are exempt in your state (as well as any requirements or limitations on these) by consulting with a professional in your area.