California

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The information given on this page is for educational and informational purposes only, and does not constitute any legal or tax advice or opinion. This page is meant to give a quick start to research by other professionals, but it should absolutely not be relied upon for any purposes whatsoever. Additionally, this page is kept current only as our time allows, and the information given here may not be current. We make NO GUARANTEES as to the accuracy of the information herein and you should not rely on it. Even professionals who use this information must independently verify whether it is correct and current.

Other California Law Sections

• California Fraudulent Transfers

• California Spendthrift Trusts

• California Charging Orders

• California Alter Ego and Veil Piercing Theories

California Asset Protection Overview

California residents and business owners often need substantial planning assistance. The following are a few examples of the problems encountered by California residents and businesses:

• California's homestead provides a maximum $125,000 homestead exemption;

• California courts have held that the statute of limitation for a fraudulent transfer claim does not begin to run until the creditor has obtained a judgment; in most other jurisdictions, the limitation period generally begins at the time of the transfer. Thus, no transfer in California may be safe from a fraudulent transfer claim until at least seven years (the stated time in the unique “extinguishment” statute of limitation under the California UFTA) has passed;

• California LLCs are subject to a gross receipts tax, which can be stiff;

• The California Franchise Tax Board is notoriously tough; and

• California debtors must choose from the state exemption systems only, as federal bankruptcy exemptions are not allowed. California divides its state exemptions into two systems. Debtors may only opt for one system; they may not pick and choose exemptions from both systems. Choosing the right system depends on the debtors’ assets, type of bankruptcy filing, and other factors.
  

California Statutory Creditor Exemptions: System 1
System 2

For additional detailed information on the use of life insurance, annuities, pension plans, and employee benefit plans for wealth preservation and asset protection, see advanced life insurance

California Homestead

• The homestead exemption limit is $50,000 in California for a single person, $75,000 for a couple, $150,000 if 65 or older, or physically or mentally disabled, $150,000 if 55 or older, and are single and earn under $15,000, or are married and earn under $20,000. [704-730].

Statute [704-730]

See also: In re McFall, 112 B.R. 336 (9th Cir. B.A.P., 1990)

California Homestead Exemption Cases

• Loula A. Amin v. Faika Khazindar,
  112 Cal. App. 4th 582 (Cal.App. Dist.2 10/06/2003)

• Henry H.Y. Kim v. First Federal Bank of California,
  B153996 (Cal.App. Dist.2 07/17/2002)

• Trudy K. Butcher v. Marceil F. Ford,
  E029806 (Cal.App. Dist.4 02/27/2002)

• Marion Mehrtash v. ATA Mehrtash,
  93 Cal. App. 4th 75 (Cal.App. Dist.2 10/24/2001)

• George S. Wynns, D.C. v. Alton J. Wilson
  No. 95-15072 (9th Cir. 07/12/1996)

• Strangman v. Duke,
  295 P.2d 12 (Cal.App.Dist.2 03/23/1956)

California Life Insurance

• A life insurance policy, or the proceeds thereof, are exempt, so long as there is a clause which prohibits the proceeds from being used to pay the beneficiary's creditor's.

Statute [10129-10133.9]

Statute [10170-10180]

• Matured life insurance benefits needed for support are exempt. (704.100 (c))

Statute

• Unmatured life insurance policy loan values, up to $9,700 for a single person and $19,400 for a couple, are exempt. (704.100(b))

Statute

• Disability or health benefits are exempt. (704.130)

Statute

California IRAs & Pension Plans

• Private retirement benefits, in cluding IRA's and Keoghs, are exempt. (704.115)

Statute

• Public retirement benefits are exempt. (704.110)

Statute

• Public employees pension plans are exempt. (Gov't 21201)

Statute

• County employees pension plans are exempt. (Gov't 31452)

Statute

California Statutory Creditor Exemptions: System 2
System 1

California Homestead

• The homestead exemption limit for real or personal property, including co-op's used as a residence, is $17,425. The unused portion of the homestead may be applied to any property. (703.140 (b) (1))

Statute

California Life Insurance

• A life insurance policy, needed for support of a family, are exempt. (703.140 (b) (11) (B))

Statute

• Disability benefits are exempt. (703.140 (b) (10) (c))

Statute

• Unmatured life insurance policies other than caredit, are exempt. (703.140(b) (7)

Statute

California IRAs & Pension Plans

• ERISA qualified benefits needed for familial support, are exempt. (703.140 (b) (10)(E)

Statute

Other California Law Sections

• California Fraudulent Transfers

• California Spendthrift Trusts

• California Charging Orders

• California Alter Ego and Veil Piercing Theories

California Business Entities

California Acts

• California Corporation Act
• California Limited Partnership Act
• California Limited Liability Company Act
• California LLC Charging Order Statute

Useful California Links

For additional detailed information relating to financial frauds and tax scams, see http://www.quatloos.com

• California Secretary of State
• California Attorney General
• California Department of Securities
• California Bar Association

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