The state of Texas offers some of the strongest strategies to protect your assets. Having a suitable asset protection attorney on your side will help you structure everything properly to avoid any issues in the future. A professional attorney will have ample experience and expertise to offer the best ways to protect your assets from potential risks.
In this article, we will learn more about asset protection in Texas and go through some of the tips to pick the best attorney for yourself. So, let us begin.
Overview Of Asset Protection In Texas
The asset protection in Texas process refers to the legal strategies and ways to protect an individual’s and business’s assets from collectors, lawsuits, and other situations that pose a financial risk. The laws of the Texas state offer some of the most favorable asset protection laws in the US, including generous homestead exemptions, personal property protections, and exemptions for retirement accounts.
Under the personal property exemptions offered by the state, you can shield your valuable personal assets like vehicles, household items, and tools of trade. On top of this, the business owners in the state can form an LLC (Limited Liability Company) to create a legal barrier between their personal and business assets. This further reduces their personal liability for debts that they take for the business.
Are There Various Types Of Asset Protection In Texas?
In Texas, there are a number of options for asset protection to cater to a variety of needs. Have a look at some of them below.
Homestead Exemption
Under the Texas homestead exemption, the primary residence is protected from creditors. If you are a homeowner in the state then you can shield an unlimited amount of home equity from most of your creditors. However, the size of your property should meet the required limits. The limit is 10 acres in urban areas and 100 to 200 acres in rural areas. With this protection, you cannot lose your home to satisfy most types of debts that you owe to creditors.
Personal property exemptions
The state of Texas offers protection for your personal property. If you are living alone in Texas then you can enjoy an exemption of $50,000 and if you are living with your family then the limit goes up to $100,000 on the personal property from creditors. These exemptions make sure that your essential personal assets stay protected in case you face any financial hardship or legal dispute.
Retirement accounts
In the state of Texas, retirement accounts including IRAs and 401(k)s, are protected from creditors. They cannot access the funds in these accounts in case you are dealing with any lawsuit or bankruptcy. The protection makes sure that all the individuals living in the states can protect their retirement savings against creditor claims for their future needs. This exemption allows them to plan their financial situation in the long run and secure retirement funds from potential financial liabilities.
All these strategies have their own benefits and limitations, so it’s crucial to appoint an attorney who understands how to easily implement them. This is to help you in complying with different state and federal laws.
Trusts
In Texas, DAPTs (Domestic Asset Protection Trusts) and irrevocable trusts are effective tools for asset protection. DAPTs are designed to protect the assets from creditors and allow the creator of the trust to retain some benefits. In the case of an irrevocable trust, the ownership of assets is transferred to a trust entity that protects them from creditors and legal judgments.
3 Things To Consider When Choosing An Asset Protection Attorney
Picking the best asset protection attorney takes specific skills and experience to protect your assets easily.
Expertise
An attorney with specialized expertise in asset protection is familiar with Texas laws related to trusts, exemptions, and the structure of your business. Try to ask questions about how long they have been practicing asset protection law and if they handled cases similar to your cases. Ask them if they are board-certified in asset protection or estate planning and from where they received their legal training. This will help you understand if they are better equipped to handle complex situations.
Client reviews
When you look at the client reviews, you get to know an attorney’s reputation and the quality of service they offer. Reading the online reviews on Google and testimonials from an attorney's former clients can help you get an idea of their success rate and client satisfaction levels.
Soft Skills
Soft skills are often underrated. There are a few soft skills to help you build a good working relationship. It's important that you assess your potential asset protection attorney's soft skills to ensure that your assets are fully protected.
Some common soft skills include:
