What assets are protected from creditors in Washington state?
Asked by: Terry Shields | Last update: May 5, 2025Score: 4.6/5 (3 votes)
Can creditors take your house in Washington state?
In most cases you will not lose your home or car during your bankruptcy case as long as your equity in the property is fully exempt. (see Washington bankruptcy exemptions) Even if your property is not fully exempt, you will be able to keep it, if you pay its non-exempt value to creditors in chapter 13.
Are IRAs protected from creditors in Washington state?
Washington state is a pretty cool place for IRAs and other retirement accounts. The reason is is that any type of retirement account, IRA, 401k, anything like that, they are protected from creditors.
How to protect assets from lawsuits in Washington state?
- Supplemental Needs Trust. This type of trust can be created by any individual who needs government benefits in the future or someone who requires assistance with asset protection. ...
- Washington living trust. ...
- Testamentary Trust.
What is exempt from garnishment in Washington state?
Eighty (80) percent of disposable earnings or thirty-five times the state minimum hourly wage, whichever is larger, is the exempt amount. This 80 percent (or thirty-five times) must be paid to the employee. The remaining 20 percent is subject to the writ of garnishment (continuing lien).
IRA Protection From Lawsuits and Creditors by State
What assets are exempt from lawsuits in Washington state?
(i) All household goods, appliances, furniture, and home and yard equipment, not to exceed $6,500 in value for the individual, said amount to include provisions and fuel for comfortable maintenance; (ii) In a bankruptcy case, any other personal property, except personal earnings as provided under RCW 6.15.
What type of bank accounts cannot be garnished?
Bank accounts solely for government benefits
Federal law ensures that creditors cannot touch certain federal benefits, such as Social Security funds and veterans' benefits. If you're receiving these benefits, they would be exempt from garnishment.
What is the strongest asset protection?
An asset protection trust (APT) is a complex financial planning tool designed to protect your assets from creditors. APTs offer the strongest protection you can find from creditors, lawsuits, or judgments against your estate. These vehicles are structured as either "domestic" or "foreign" asset protection trusts.
How do you shield assets from creditors?
- Asset titling (Titling assets in a spouse's name, or tenancy by the entirety)
- Homestead.
- Retirement accounts and IRAs.
- Limited liability entities (LLCs, limited partnerships, S corporations)
- Irrevocable gifts (Including gifts to trusts)
- Asset protection trusts.
Can you lose your house in a lawsuit in Washington state?
There are some assets that are protected from seizure in Washington. In general, it will not be possible for a creditor to take a person's primary residence. Additionally, there are other types of income that are usually exempt from seizure in these circumstances.
What type of accounts are protected from creditors?
This creditor protection can be a valuable tool in the event of a legal liability, personal injury lawsuit, or bankruptcy. Accounts that receive special protection include 401(k) plans, pension plans, profit sharing accounts, SEP IRAs, SIMPLE IRAs, 403(b) plans, 457 plans, traditional IRAs, and Roth IRAs.
Can creditors take your inherited IRA?
Yes, if someone files for bankruptcy and they have money from an inherited IRA, those funds can be taken by creditors. This is true even though retirement funds are often exempt in bankruptcy filings.
Can creditors go after my IRA?
If your retirement account is not qualified or covered by ERISA, then a judgment creditor could potentially seize it. That is because some non-ERISA accounts in California do not have the same protections as ERISA accounts. Types of non-ERISA accounts that may be vulnerable include: IRAs, Roth IRAs and SIMPLE IRAs.
Do you inherit your parents debt in Washington state?
Most people in Washington have some type of debt when they pass away. This means that the responsibility for the payment usually has to go somewhere. However, you would probably not have to pay personally. If you were the heir of an estate, you would not have to worry about paying those debts in most cases.
What assets can a debt collector take?
Debt collectors can only take money from your paycheck, bank account, or benefits—which is called garnishment—if they have already sued you and a court entered a judgment against you for the amount of money you owe. The law sets certain limits on how much debt collectors can garnish your wages and bank accounts.
Can creditors go after personal assets?
Although it rarely happens, judgment creditors can seize a debtor's personal property to satisfy all or part of a money judgment. Exemptions set by state law protect certain personal property, a portion of your wages, and — in most states — an interest in a real property you're using as a homestead.
What is the best trust to protect assets from creditors?
Irrevocable trusts
This can give you greater protection from creditors and estate taxes. As stated above, you can set up your will or revocable trust to automatically create irrevocable trusts at the time of your death. When you use your will to create irrevocable trusts, it's called a testamentary trust.
How much does an asset protection lawyer cost?
Asset protection planning can be fairly straightforward. Sometimes there are no tax issues involved and the client's goal is simply to shield the family home or retirement savings from liability claims. In these cases you might expect legal fees in the range of $5,000-$6,500 depending on the complexity involved.
What money is protected from creditors?
401(k)s and IRAs are two common retirement accounts that apply for this benefit. Retirement accounts provide creditor protection because the money in these accounts is typically used for retirement expenses, not current debts. Therefore, creditors can't seize these assets to pay off debts.
How do you make assets untouchable?
The fastest, easiest—and cheapest—move you can make is to take out a large umbrella policy to safeguard assets. Another simple but powerful strategy is to place your assets in someone else's name, such as your spouse's. If you're sued, those spouse-controlled assets are often untouchable.
Can creditors go after an irrevocable trust?
If you are the beneficiary of an irrevocable trust, judgment creditors will not typically be able to take money directly from the trust. However, they usually can access distributions you receive from the trust.
What state has the best trust for asset protection?
Best States For Asset Protection Trusts
Alaska, Nevada, and Delaware stand out as prime choices for establishing trusts with a specific eye towards asset protection, but each comes with its unique legal nuances.
What bank account can the IRS not touch?
What Accounts Can the IRS Not Touch? Any bank accounts that are under the taxpayer's name can be levied by the IRS. This includes institutional accounts, corporate and business accounts, and individual accounts. Accounts that are not under the taxpayer's name cannot be used by the IRS in a levy.
What states are entirely immune from bank account garnishments?
What States Prohibit Bank Garnishment? Bank garnishment is legal in all 50 states. However, four states prohibit wage garnishment for consumer debts. According to Debt.org, those states are Texas, South Carolina, Pennsylvania, and North Carolina.
Can a creditor take all the money in your bank account?
If you've been sued for an unpaid debt, the court may allow your creditors to directly withdraw funds from your bank account via a levy. With an account levy in place, you may be unable to access all your funds.