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Asset Protection

Experienced San Jose Lawyers Helping Secure Your Interests

Assets can be lost in divorce or through litigation or creditors’ claims. It is critical to protect your assets by using the legal tools available to you. Failing to select and execute a strong asset protection strategy can result in your property being seized by creditors. If you need to develop an asset protection plan, you should discuss your circumstances with the San Jose asset protection lawyers at Sowards Law Firm. Legal strategies to shield assets include trusts, retirement plans, the homestead exemption, insurance, and forming various business structures to hold property.


Trusts are among the most popular tools for protecting property. They are legal arrangements in which you hand over your assets to the trust to be managed by a trustee for the benefit of beneficiaries. You can set conditions for the use of the assets. There are many different types of trusts, including irrevocable trusts, inter vivos trusts, spendthrift trusts, discretionary trusts, special needs trusts, and qualified personal residence trusts. These trusts have varying degrees of effectiveness for asset protection purposes.

For example, a qualified personal residence trust may be appropriate to protect real estate. A qualified personal residence trust is a type of irrevocable trust in which a homeowner shifts their residence out of their estate and gives it as a low-tax gift. However, they retain the right to live in the residence without rent for a certain term.

California does not allow domestic asset protection trusts. If you want this type of protection, you must set up the trust out of state. Sometimes people in California set up domestic asset protection trusts in other states or offshore trusts in jurisdictions that have laws that protect property owners.

Retirement Plans

Another strategy with which an asset protection attorney in San Jose might assist you involves placing funds in a retirement plan. The Employee Retirement Income Security Act of 1974 (ERISA) mandates that a qualified retirement plan must include provisions that do not allow the retirement property to be alienated. Assets in retirement plans established under ERISA, such as 401(k) plans, are protected. Plans that are not established under ERISA, such as a Roth IRA or traditional IRA, do not provide the same degree of protection.

In California, private retirement plans may be protected from collection by creditors. They can be funded by using any valuable asset, including stocks, mutual funds, accounts receivable, or limited liability company interests. However, under section 704.115, to be protected from judgments and bankruptcy, the private retirement plan needs to be designed and used for retirement purposes. If the plan is misused or created only for asset protection, it is disqualified as a private retirement plan. These are complex legal structures that require careful planning.

The Homestead Exemption

California has a homestead exemption. This can keep a creditor from selling your home if your equity qualifies. The amount of this exemption varies for single people, married spouses, and the elderly or disabled. It can be difficult to protect an entire home by using the homestead exemption, although the amount of the exemption will be greater as of January 2021.

Business Structures That Allow Asset Protection

Our San Jose asset protection attorneys may be able to help you form business structures to keep commercial creditors from reaching your personal assets as long as you have a valid business purpose. Structures that may allow you to protect personal assets include corporations and limited liability companies. Corporations are legal entities that are wholly distinct from owners or shareholders in case of litigation. One of the primary purposes of corporations is to shield a business owner’s personal assets from corporate debts and liabilities. Limited liability companies restrict the personal liability of partners and shareholders. There are circumstances, however, in which the distinction between company and owner can be pierced, and personal assets may be seized. Formalities must be scrupulously followed in connection with business structures such as corporations and limited liability companies.

Consult a Sophisticated San Jose Attorney

Most people hope to protect their hard-earned assets against claims and losses. If you are concerned about asset protection, you should discuss your circumstances with the seasoned lawyers at Sowards Law Firm. We also represent clients in Campbell, Mountain View, Palo Alto, Santa Clara, Berkeley, Oakland, Concord, Walnut Creek, San Rafael, Salinas, San Mateo, Santa Cruz, and San Francisco. Call us at (408) 371-6000 or complete our online form to seek guidance from an asset protection lawyer in San Jose.

Client Reviews
I really appreciate the time spent in explaining the process of preparing a Living Trust; the professionalism and friendliness of everyone! I also appreciate the presentation of the materials both binder/print and soft copies. I highly recommend Sowards Law Firm. Karen O'Brien
Ben and team recently helped us with a new estate plan. Their service was timely, thorough, and very professional. They patiently explained concepts we were unfamiliar with. We were very satisfied and recommend their firm without hesitation. Brian Giambattista
Ben was very professional & knowledgeable when tailoring the needs of my end of life documents. I have utmost confidence in his abilities and have no hesitation recommending him for estate management. Janet Burks Giambattista