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Richard, Attorney
Category: Legal
Satisfied Customers: 53696
Experience:  Attorney with 29 years of experience.
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My husband was diagnosed with diabetes and kidney disease and

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My husband was diagnosed with diabetes and kidney disease and he is 51. He's working but probably won't be past 55. There is a big possibility of hospital bills down the road. How do we protect our assets from being taken if this occurs. We have home paid for $150K, Cabin paid for $50K, Annuity $125K, Savings $30K, 401K's $75K and I'm working earning about $35K/yr. Your help is appreciated. thanks, Connie
Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.

Good morning. First, your homestead exemption is $150,000 in equity so your house is totally protected up to $150,000 in equity. Your retirement accounts are exempt and cannot be touched by any medical creditors. With regard to your other assets that are not exempt, you might want to consider putting them 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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Customer: replied 3 years ago.


Thanks for the answer. Are the 401k's considered retirement accounts?

Thanks for following up....Yes a 401k is a retirement account. :)

Thank you so much for the positive rating! I appreciate having had the opportunity to serve you! If I can be of assistance to you in the future, just look me up and I will be happy to help!

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