Veterans often face a cascade of challenges at home and abroad – Asset seizure by judgment creditors should not be one of them. With a majority of U.S. veterans being over the age of seventy-five and many seeking to protect their socio-economic status upon return from service,
significant attention should be placed on the Asset Protection and Estate Planning tools available to protect the economic interests of servicemembers.
Title 38 of the United States Code protects compensation, pension, and other benefits issued by the U.S. Department of Veteran Affairs from creditors’ claims and seizure under process issued for the collection of debts. While the purpose of federal exemptions is to protect the veteran, there are important caveats to the exemptions worth noting.
In general, VA benefits are vulnerable to seizure if the veteran passes away, gets divorced, or faces a debt obligation to a nation’s creditor (any U.S. government agency). Regarding the duration of the exemption, compensation, pension, and other funds are only protected in the course of transmission to the veteran. The moment the benefit is paid to the veteran, the funds become liable for seizure. As a result, property or investments purchased with such benefits are not protected.
In light of these creditor exemption restrictions, proper Asset Protection and Estate Planning tools have beneficial outcomes for veterans. To creditor-proof veterans’ assets, there are a variety of entities to take into consideration. Each type of entity has its own characteristics and features, and the selection of one depends on the goals of the veteran. For example, if a veteran’s goal is asset protection during and after their lifetime, limited liability companies, limited partnerships, and different trusts are some of the methods available to safely title and protect their benefits.
The Presser Law Firm, P.A. offers Asset Protection and Estate Planning services that are individualized, customized, and tailored to our client’s specific needs. To discuss a plan unique for veterans and their unique circumstances, contact us today to schedule a complimentary preliminary consultation. On behalf of the Presser Law Firm family, thank you to our veterans and military members for your service.