Ch. 9: Statutory Exemption Planning

• Homestead Exemptions

Synopsis: Discussion of the homestead exemption.

Definition: Homestead Exemption (a/k/a “Homestead Protection”) – A statutory exemption against collection given to certain interests in real property being used as the primary residence of the debtor.

References to each state's homestead acts are available via http://www.assetprotectionbook.com/state_resources.htm

• Other Exemptions

Synopsis: Discusses other exemptions from collection other than homestead, such as for life insurance, annuities, property held in joint tenancy, and tenancy by the entireties.

References to each state's statutory creditor exemptions are available via http://www.assetprotectionbook.com/state_resources.htm

• Changing Residences

Synopsis: Discusses how exemptions can be affected by the changing of state of residence.

• Retirement Plans and ERISA

Synopsis: Discusses how certain retirement plans are protected from creditors under state and federal law, but also how many plans are not protected.

Definition: ERISA Anti-Alienation Provision – A provision found in the Employee Retirement Security Act (ERISA) that prohibits a participant in an ERISA-qualified trust from transferring his or her interest in the plan to others, and which effectively prevents a creditor from attacking the assets of the plan while they are in the trust.

The ERISA anti-alienation provisions are covered in additional depth at http://www.assetprotectionbook.com/erisa_anti-alienation_provisions.htm

• Advanced Plans

  Synopsis: Example given of the 412(i) Plan as a form of advanced employer-sponsored tax-qualified retirement plan affording significant asset protection benefits.

  Definition: 412(i) Plan – A type of defined benefit plan that requires the use of insurance for funding, and which provides certain inherent asset protection advantages.

  More information regarding 412(i) plans are available at http://www.assetprotectionbook.com/412i_defined_benefit_plans.htm

  More information regarding 419A(f)(6) plans and VEBAs are available at http://www.assetprotectionbook.com/419A_Employee_Benefit_Plans.htm

• Errata

Footnote #2 should read: The following jursidictions that provide for Tenancy By The Entirety are Alaska, Arkansas, Delaware, District of Columbia, Florida, Hawaii, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Jersey, New York, Mississippi, North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Vermont, Virginia, Tennessee, and Wyoming.