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We’ve been getting a lot of questions about how asset protection laws vary from state to state.  One state that people have questions about in particular is California. So let’s take a look at how things operate in California in terms of asset protection. You may also be wondering if you need a local asset protection attorney if you’re in California.

Asset Protection in California

First, let’s discuss exempt property.  Exempt property is simply property that doesn’t need asset protection, because it is exempt from the claims of creditors.  It’s interesting to note that California does not offer very good homestead exemptions. For example, a single person is only allowed to claim a $50,000 exemption in his or her home.  That means that if an individual with $300,000 of equity is the subject of an adverse judgment in litigation, then only $50,000 of the equity in his or her home is protected.  Such a person definitely needs asset protection.

Homestead & Other Exemptions in California

Homestead protection is not much better for married couples and is only in the amount of $75,000.  If you take just a little bit of time to think about the value of real estate in California, it quickly become apparent that the amount of asset protection offered by the homestead exemption is very small.

One good feature of the asset protection law in California is that it is automatic.  In other words, a California resident doesn’t have to do anything to claim the exemption.  While Florida offers excellent homestead protection, it’s only available to people who affirmatively claim it.

Matters get somewhat complicated based on the socio-economic status of a debtor.  A debtor is simply a person who owes money.  The California asset protection law allows for an exemption of $150,000 in the following circumstances:

  • If the debtor or debtors spouse is over 65 years of age, or
  • If the debtor has a physical or mental disability rendering them unable to work, or
  • If the debtor is 55 years of age with an gross income of less than $15,000 (if single) or $20,000 (if married).

It’s probably safe to say that other than the first exception listed above, nobody wants to qualify for the increased homestead exemption.

Other exempt property includes ERISA qualified retirement accounts, and California is generous in that it offers protection of non-ERISA plans as well.  Unmatured life insurance is also generally exempt to the extent of $9,700 of the loan value.

Asset Protection Attorney for California

It is safe to say that residents of California probably need comprehensive asset protection plans more than residents of over states.  If you have any questions, contact an asset protection attorney, because only then can you be sure to safely navigate the law and obtain the most comprehensive asset protection plan available.  Please keep in mind that the facts and figures discussed in this article may be dated, as laws are constantly changing.

This Post Has 2 Comments

  1. how can my father hide his assets and apply for Medicaid for long term care … he is 88 years old and in and out of rehab after surgery … They say he has too many savings accounts exceeding the required amount of assets to qualify for Medicaid…He lives in Columbus…Ohio

    1. John, I am sorry your father has experienced these difficulties. There are Medicaid trusts that can be used to help your father qualify for long term care benefits. If he is married, he probably has more options than if he is single. If he is a veteran and served during certain times of military conflict (WWII, Korea, Viet Nam, etc) then there are other VA benefits he may also qualify for. What you should seek is an “Elder Law” attorney locally who can explain the various options for obtaining benefits. Often times when giving away assets to qualify for Medicaid benefits, there is a “look-back” period of ineligibility that is created, but benefits are ultimately available after this period has passed. The rules are technical, so consultation with a local attorney is highly recommended.

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Pashmina Lalchandani

CEO & Co-Founder, Bar & Cocoa / Owner, Flow Simple
December 9, 2010, Douglass was a client of Pashmina’s

I’ve known Doug in many contexts, as a friend, as a client and as a business partner and he impresses me on all levels. He’s dependable, smart, generous and I wouldn’t hesitate recommending him and his law firm to anyone.
He’s the best and most ethical lawyers providing asset protection with rock solid strategies to give you peace of mind about your wealth. Straight forward, and straight talk. Doug is exactly the lawyer I want on my side. If I send someone to Doug, I know they’ll thank me for it!

Social & Solar Entrepreneur, Pan Afrikan Theorist, Translator/Interpreter,
Founder & Visionary Leader @ Afrikanpride.
March 12, 2011, Marlon E. D. J. worked with Douglass but at different companies

Doug is one of the most powerful thinker i have came across. During the short time that i have known Doug he has been a great source of inspiration. He has a simplistic yet effective and accurate way to analyze anything you bring to his attention, and then by asking you key questions he gets you to see the light at the end of the tunnel. Besides being extremely bright, he is a genuine and caring individual which is why I feel fortunate to know him. I can say without a doubt that he his the person you would want to talk to if you were in need of a person with his expertise.
Most of the lawyers out there will probably meet your needs, but if you are looking for someone to exceed your expectations and give you that wow factor, look no more he is the person for the job.

Patricia Salter

Associate Dentist at Smileology
December 1, 2010, Patricia was a client of Douglass’

I have been a client of Douglas Lodmell’s since 2001. My main concern was asset protection in this litigious society. I can sleep alot better at night knowing I have the instruments in place to protect the fruits of my labor, and that they will not end up in the hands of a slick trial attorney.

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