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Good morning. All the retirement asset accounts of both of you are exempt and beyond the reach of creditors under N.Y. CVP. LAW § 5205 : NY Code - Section 5205. This statute also delineates all other personal property that is exempt. With regard to real property held as tenancy by the entirety, under New York law, your interest in a tenancy by the entirety to be sold under execution upon a judgment against you, but, the purchaser at such sale would become a tenant in common with your spouse, subject to her right of survivorship and is entitled to share
in the rents and profits, but not the occupancy." Other assets in your wife's name only would not be subject to the creditor's claims unless they were transferred to your spouse within a year if they left you otherwise unable to pay your debts, including the judgment, in which case a court could allow access to a creditor under the Uniform Fraudulent Transfer Act. With regard to any assets at risk, in your situation, a person might want to consider putting their non-exempt
assets (retirement income and retirement account assets are exempt and can be
left in place) into a family limited partnership. Carefully drafted, this
converts assets that a creditor would find attractive to go after into a
limited partnership interest with no control, no rights other than that of an
assignment, no transferability, no marketability, and no right to
distributions. The transfer is for fair market value...i.e., you are simply
exchanging one asset for another of equal value to you. And, you maintain control through a general
partnership interest that you control. Yet, when complete it essentially is an asset
no one wants and thus the creditor is less likely to pursue the debtor. Family limited partnerships must be carefully
drafted and one would need an attorney experience in this area to do so, but
they can be a very effective method of asset protection.
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