Asset Protection FAQs

It’s a strategy to legally protect personal and business assets from lawsuits, creditors, and long-term care costs.

Q: What assets are protected from creditors in Massachusetts?

Massachusetts law provides exemptions that shield certain property from creditors. 

Examples include:

• Retirement Accounts – 401(k)s, IRAs, and similar qualified retirement accounts are generally protected.
• Life Insurance – Cash value in life insurance policies payable to a spouse or dependent may be exempt if qualified beneficiaries are unchanged since inception of coverage.
• Homestead Protection – Up to $1,000,000 of equity in your primary residence is protected if you file a Declaration of Homestead at the Registry of Deeds. (Additional protection available if you are elderly)
• Certain Trusts – Properly structured irrevocable trusts can provide strong protection for assets placed in them.

Q: Are 529 education savings plans protected?

While Massachusetts law does not provide specific protections  for 529 plans against creditors, and they are often treated favorably in bankruptcy, though certain timing considerations and contribution limits apply.

It depends.  Irrevocable trusts can be structured to protect your assets from future creditors and Medicaid recovery. Revocable trusts generally do not protect assets.

Using a Medicaid-compliant irrevocable trust can protect your home if assets are transferred at least five years before applying for Medicaid.

Start early—before claims of creditors or lawsuits arise. Late transfers can be undone by courts.

Yes. ERISA-qualified plans are protected. IRAs have significant protection under state law.

Pre-nups, post-nups, and trusts may help. Nothing is 100% guaranteed in divorce proceedings, but these tools provide a layer of protection.