How to Protect Your Assets from Creditors

A properly prepared estate plan is the blueprint for distributing your assets upon your death. Your estate plan also provides guidance about who will handle your financial and legal affairs if you cannot manage them yourself and gives instructions to medical professionals about your preferences for end-of-life care.

But your estate plan is more than that.

A thoughtfully prepared estate plan can also protect your assets against claims from future creditors. A skilled estate planning attorney can use various legal strategies and techniques to shield your assets from creditors and make it more difficult for them to seize your assets or collect judgments.

Employing these techniques as part of your estate plan is perfectly legal. Planning to defraud your creditors is not. To ensure that the estate planning techniques you use will pass muster, it is important that you work with an experienced estate planning attorney who can provide advice on asset protection strategies and put a plan in place to protect your assets from future creditors.

At the Campbell Law Firm, Washington state estate planning attorney Justin Campbell understands how to protect your assets from creditors. He will discuss your estate planning goals, identify your needs, and put a plan in place that will protect your assets from future collection actions.

Who Can Benefit from Asset Protection Planning?

People who work in high-risk professions, like contractors and architects, doctors and lawyers, pilots, and paramedics are at higher risk of being targeted in lawsuits. Similarly, people in the public eye, like politicians, entertainers, athletes, and high-net-worth individuals, should consider taking steps to protect their assets from creditors.

But really, anyone who has significant assets can benefit from asset protection strategies. These techniques help ensure the continued viability of your estate and help ensure that you will have a financial legacy to pass on to future generations.

Asset Protection Strategies

You’ve worked hard to make money, and you want to keep it and pass it on to future generations. But a divorce, a professional liability claim, a car accident, or significant medical bills can derail your financial plans. Fortunately, there are asset protection strategies you can use to protect yourself and your estate against claims by future creditors so you can pass on a financial legacy to future generations.

Asset Protection Trusts

Your attorney may recommend using an asset protection trust in conjunction will your last will and testament and other estate planning documents to protect your estate. A trust can provide protection against claims by creditors such as long-term care facilities, liens, tax liabilities, and other claims.

Placing assets in a trust creates an additional hurdle that creditors must overcome to access them. But to be effective, you should consult with an experienced attorney to ensure that a trust is the right estate planning tool for your situation and that the trust is properly set up.

Retirement Accounts

For many people, a significant portion of their estate consists of assets held in retirement accounts.

Under Washington law, qualified retirement accounts and pensions are generally exempt from seizure by creditors. Therefore, one basic asset protection strategy is simply placing money into qualified retirement accounts.


Like qualified retirement accounts, proceeds from life insurance and disability insurance policies generally cannot be seized by creditors. Therefore, purchasing life insurance policies is another easy way to protect your assets from creditors.

You may also consider purchasing an umbrella insurance policy to provide additional asset protection. An umbrella insurance policy provides additional insurance coverage beyond that which is provided by a homeowners’ insurance policy, renters’ insurance, or your automobile insurance. An umbrella insurance policy can also provide additional protection if you are sued for professional negligence.


You can also protect your assets from creditors by making charitable contributions or gifts to your child(ren). When you make a gift, you give up control of those assets. But if financial gifts are already part of your estate plan, making them before your death places assets beyond the reach of potential creditors.

Current federal law allows for the tax-free transfer of up to $14,000 to a single person per year. These gifts can be used to protect assets from creditors and to reduce taxable income. In addition, a gift can be structured to reduce or eliminate estate taxes.

Limited Liability Companies and Other Business Structures

Your estate planning attorney may also recommend using a business entity to protect your assets against claims by creditors. Corporations, limited liability companies (LLCs), and limited partnerships all provide liability protection as long as all corporate formalities are followed.

In general, business liability does not extend beyond assets owned by the business. By placing business assets within a corporate entity, you can protect yourself and your personal assets from future liability.

The Campbell Law Firm Helps Protect Your Assets Against Creditor Claims

Protecting your assets against potential claims by creditors is no easy feat. But an experienced estate planning attorney can create a plan that will protect your assets and preserve your legacy so you can pass it on to future generations.

Every situation is unique, and there is no one-size-fits-all solution to asset protection. In addition, there are strict rules that must be followed to adequately protect your assets against claims by creditors.

Washington estate planning attorney Justin Campbell understands the complex laws that apply to asset protection. He can prepare an estate plan that will meet your needs and provide significant protection against creditor claims.

Learn more about our estate planning services, and contact us today to schedule a confidential consultation to discuss your situation and how we can help. Call (360) 588-4111, email, or complete our online form.

The Campbell Law Firm proudly serves people throughout Skagit, Island, and San Juan Counties, including Anacortes, Mount Vernon, Burlington, Sedro-Woolley, Friday Harbor, Oak Harbor, and Coupeville.