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California Asset Protection Laws

Filed under Asset Protection Strategies. Fact checked on April 22, 2012.

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These assets are exempted from a state court or bankruptcy proceeding in California.. However, a debtor must choose between Option 1 or 2.

Option 1

  • Homestead: Real or personal property you occupy including a mobile home, boat, stock cooperative, community apartment, planned development or condo, up to $75,000 if single and not disabled; $100,000 for families if no other member has a homestead. If one spouse files, he or she may exempt one-half of amount if home held as community property and all of amount if home held as tenants in common. $175,000 limit if age 65 or older, or physically or mentally disabled; $150,000 limit if 55 or older, single and earn under $25,000, or married and earn under $35,000, and creditors seek to force the sale of the home. Sale proceeds exempt for 6 months after received. Husband and wife may not double the exemption. May file a homestead declaration.
  • Pensions and Retirement Benefits: Funds exempt for county employees, county firefighters, county peace officers and public employees. IRA exemptions for conventional, Roth, SEP and SIMPLE plans. Roth IRAs and regular IRAs up to $1,250,000 per person.
  • Insurance: Disability or health benefits. Fraternal unemployment bonds. Life insurance proceeds or avails if clause prohibits proceeds from being used to pay beneficiary's creditors. Fidelity bonds. Homeowner's insurance proceeds for 6 months after received, to homestead exemption amount. Matured life insurance benefits needed for support. Unmatured life insurance policy loan value to $12,200; husband and wife may double.
  • Personal Property: Appliances, furnishings, clothing and food needed. Bank deposits from Social Security Administration up to $3,050 ($4,575 for husband and wife). Bank deposits from other government benefits up to $1,525 ($2,275 for husband and wife). Building materials up to $3,050 to repair or improve home (husband and wife may not double). Burial plot. Health aids. Jewelry, heirlooms and art up to $7,625 total (may not be doubled). Motor vehicles to $2,900 in auto insurance if vehicle(s) lost, damaged or destroyed (may not be doubled). Personal injury causes of action. Personal injury recoveries needed for support; if receiving installments, at least 75%. Wrongful death causes of action. Wrongful death recoveries needed for support; if receiving installments, at least 75%.
  • Tools of Trade: Tools, implements, materials, instruments, uniforms, books, furnishings, equipment, up to $7,625 total; up to $15,250 total if used by both spouses in same occupation (cannot claim motor vehicle under both tools of trade exemption and motor vehicle exemption); business motor vehicle up to $4,850 ($9,700 for both spouses).
  • Miscellaneous: Business partnership property. Business or professional license, except liquor license. Inmates' trust funds up to $1,525 (husband and wife may not double).
  • Wages: Public employees' vacation credits (if receiving installments, at least 75%). 75% of wages paid within 90 days of filing for bankruptcy.
  • Public Benefits: Aid to blind, aged, disabled. AFDC (Aid to Families with Dependent Children). Financial aid to students. Relocation benefits. Union benefits due to labor dispute. Unemployment benefits. Workers' compensation.
  • Wild Card: None.

Option 2

  • Homestead: Real or personal property including a co-op, used as residence up to $22,575. Unused portion of homestead may be applied to any property up to $15,000.
  • Pensions and Retirement Benefits: ERISA-qualified benefits needed for support. IRA exemptions for conventional, Roth, SEP and SIMPLE plans. Roth IRAs and regular IRAs up to $1,250,000 per person.
  • Insurance: Disability or health benefits. Life insurance proceeds or avails needed for support. Unmatured life insurance contract accrued avails to $13,675. Unmatured life insurance policy other than credit.
  • Personal Property: Animals, crops, appliances, furnishings, household goods, books, musical instruments and clothing up to $525 per item. Burial plot up to $25,575, in lieu of homestead. Health aids. Jewelry up to $1,350. Motor vehicle up to $5,100. Personal injury recoveries up to $25,575 (not to include pain and suffering or pecuniary loss). Wrongful death recoveries needed for support.
  • Tools of Trade: Implements, books and tools of trade up to $7,625.
  • Miscellaneous: Alimony. Child support needed for support.
  • Wages: None.
  • Public Benefits: Unemployment benefits. Crime victim's compensation. Public assistance. Social Security. Veteran's benefits.
  • Wild Card: $1,350 of any property. Unused portion of homestead or burial exemption of any property.

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