Asset Protection Attorneys in New York
Asset protection in New York is the practice of arranging what you own, before any claim exists, so that a lawsuit, a business failure, or a professional liability judgment is less likely to take everything you have built. It is not about hiding assets. It is about using the protections New York law already gives you, adding insurance and entities where they help, and avoiding the transfers that a court will unwind.
New York is a demanding state for this work. It does not recognize self-settled asset protection trusts, its exemption amounts are modest compared to the value of a downstate home, and its voidable transactions law gives creditors years to challenge a transfer made at the wrong time. At the same time, New York offers strong protection for retirement accounts, life insurance, tenancy by the entirety between spouses, and limited liability companies. A good plan uses each of these tools for what it does well.
Milvidskiy Law Group P.C. advises individuals, families, physicians, business owners, and property owners on asset protection under New York law. Our attorneys practice in New York, New Jersey, and Connecticut.
Key Takeaways:
- New York law makes a trust you create for your own benefit void as against your creditors, so the domestic asset protection trusts marketed in other states generally do not work for New York residents in the way people expect.
- New York protects retirement accounts, life insurance payable to others, annuities, and a limited amount of home equity by statute, and married couples can hold real estate as tenants by the entirety.
- Timing is the whole game. A transfer made to hinder, delay, or defraud creditors, or made without fair value while you are insolvent, can be undone under New York’s Uniform Voidable Transactions Act.
Insurance comes first
The least expensive layer of protection is liability insurance, and no legal structure replaces it. Homeowners, auto, and landlord policies carry limits that are often far below what a serious injury claim can produce. A personal umbrella policy sits on top of them and adds coverage for a relatively small premium. Professionals need adequate malpractice coverage. We review coverage at the start of an engagement, because a well-insured client can often let insurance absorb a claim without testing the rest of the plan.
What New York law already protects
Your home, up to a limit
New York’s homestead exemption, found in the Civil Practice Law and Rules, protects equity in a home, condominium, cooperative apartment, or mobile home that you own and occupy as your principal residence. The protected amount depends on the county. For 2026, the statute lists $150,000 for Westchester, Rockland, Putnam, Nassau, Suffolk, and the five New York City counties, $125,000 for Dutchess, Orange, Ulster, Albany, Columbia, and Saratoga, and $75,000 for the rest of the state. The exemption applies to equity above mortgages and liens, and it does not protect against a judgment for the purchase price of the home itself. These figures are set by the Legislature and can change. For most downstate homeowners they cover only a fraction of the equity, which is why the home usually needs additional planning.
Retirement accounts
New York exempts qualified retirement plans and individual retirement accounts from most judgment creditors and treats them as spendthrift trusts, even though you funded them yourself. There are exceptions for contributions made within 90 days before a claim, for contributions that are themselves voidable transfers, and for court orders enforcing child support, spousal support, or a qualified domestic relations order. Within those limits, an IRA or 401(k) is one of the most protected assets a New Yorker can hold.
Life insurance and annuities
Under New York’s Insurance Law, life insurance proceeds payable to a third-party beneficiary are protected from the policy owner’s creditors, and annuity benefits payable to the person who funded the contract are not subject to execution, although a court can order a judgment debtor to pay a portion of the payments in installments. Ownership and beneficiary designations must be set up correctly for this to apply.
Tenancy by the entirety
When a married couple takes title to New York real estate together, the deed creates a tenancy by the entirety unless it says otherwise. A creditor of one spouse alone generally cannot force a sale during the marriage, and if the debtor spouse dies first, the survivor owns the property free of that creditor. The protection ends at divorce and does nothing against a creditor of both spouses, so it is a layer rather than a complete answer.
Trusts under New York law
Self-settled trusts do not work
New York’s Estates, Powers and Trusts Law provides that a disposition in trust for the use of the person who created it is void as against that person’s existing and subsequent creditors. If you create a trust and keep the right to benefit from it, your creditors can reach it. That rule is why New York residents cannot rely on the domestic asset protection trusts promoted in Nevada, Delaware, South Dakota, and similar states. A New York court is not bound to honor another state’s statute, and the law on cross-border enforcement is unsettled. We do not recommend these trusts to New York clients as a primary strategy.
Third-party and spendthrift trusts do work
The rule is different when someone else creates the trust for you. Property held in a trust that was created by, or funded by, a person other than the beneficiary is generally exempt from the beneficiary’s judgment creditors, and New York law prevents a beneficiary from assigning the right to trust income unless the trust instrument allows it. This is why some of the most effective protection is built into a parent’s estate plan: an inheritance left in a properly drafted discretionary trust is generally protected from the child’s creditors and divorcing spouses in a way an outright inheritance is not. We build these provisions into estate plans, living trusts, and dynasty trusts as a matter of practice.
Irrevocable trusts you create for others
You can create an irrevocable trust for your spouse, children, or grandchildren and give up your own right to the property. Because the trust is not for your use, the void-as-against-creditors rule does not apply. The trade-off is real: you give up the assets. A Medicaid asset protection trust is a specialized version of this idea aimed at long-term care costs rather than lawsuits, and the two goals call for different drafting. Our Medicaid planning in New York page explains that side of the analysis.
Limited liability companies in New York
An LLC separates the liabilities of a business or rental property from your personal assets. New York’s Limited Liability Company Law limits a judgment creditor of a member to a charging order against the member’s interest: the creditor can receive distributions the member would have received but has no right to take possession of the company’s property. That is meaningful protection, although New York’s statute is less restrictive than those of some other states.
Two New York-specific points catch people by surprise. First, under current law a New York LLC must publish notice of its formation once a week for six weeks in two newspapers designated by the county clerk where its office is located, and file a certificate of publication with the Department of State within 120 days after the articles of organization take effect, or its authority to do business is suspended until it does. Second, New York’s Limited Liability Company Law does not provide for series LLCs, so separating properties generally means separate entities.
Clients often ask about Wyoming, Delaware, or Nevada LLCs. An out-of-state LLC that holds New York real estate must apply to the Department of State for authority as a foreign LLC and satisfy its own publication requirement, and a New York court hearing a claim about New York property will apply New York law to many of the questions that matter. Out-of-state entities have a place in some plans, but they are rarely the shortcut they are sold as.
Timing and New York’s voidable transactions law
New York adopted the Uniform Voidable Transactions Act as Article 10 of the Debtor and Creditor Law, effective for transfers made on or after April 4, 2020. A transfer is voidable if it was made with actual intent to hinder, delay, or defraud any creditor, or if you did not receive reasonably equivalent value and were insolvent, undercapitalized, or about to take on debts you could not pay. A creditor generally has four years after the transfer to sue, or one year after the transfer was or reasonably could have been discovered if that is later.
The lesson is that planning should happen when the sky is clear. Transfers made after a demand letter, an accident, or a known business problem invite a voidable transaction claim. If you are already facing a claim, we will tell you honestly what can and cannot be done.
Who we help, and how
Our asset protection clients include physicians and other professionals with malpractice exposure, landlords and real estate investors, business owners with personal guarantees, parents who want an inheritance to survive a child’s divorce, and families with property or heirs in more than one state.
We start with a full picture of what you own, how it is titled, what you owe, and where your risk comes from. We identify what is already exempt, then recommend the structures that fit: retitling, entity formation, trust provisions in your estate plan, an irrevocable trust for family members, or a combination. Each recommendation is weighed against tax consequences, mortgage terms, control, and cost, and we handle the estate plan and the asset protection plan together so the pieces work.
Speak with a New York asset protection attorney
We serve clients throughout New York State from our Tarrytown office in Westchester County, and by video conference and phone. If you live in Westchester County, see our asset protection in Westchester County page. To discuss your situation, request a consultation and we will schedule a time to talk.
This page is provided for general informational purposes only and does not constitute legal advice. Laws change and figures are adjusted periodically. For advice about your situation, consult a qualified attorney.
Frequently Asked Questions
Can I set up a domestic asset protection trust as a New York resident?
Not with confidence. New York’s Estates, Powers and Trusts Law makes a trust created for the use of the person who created it void as against that person’s creditors. Some New Yorkers form trusts under the laws of Nevada, Delaware, or South Dakota, but a New York court hearing a New York creditor’s claim is not bound to apply the other state’s statute. We treat these trusts as high-risk and rarely recommend them.
How much of my home equity is protected from creditors in New York?
New York’s homestead exemption protects a fixed amount of equity in your principal residence that varies by county. For 2026, the statute provides $150,000 in Westchester, Rockland, Putnam, Nassau, Suffolk, and New York City, $125,000 in Dutchess, Orange, Ulster, Albany, Columbia, and Saratoga, and $75,000 elsewhere. The exemption is measured above mortgages and liens and does not apply to a judgment for the purchase price of the home. The Legislature can change these amounts.
Are my IRA and 401(k) protected from lawsuits in New York?
Generally yes. New York exempts qualified retirement plans and IRAs from most judgment creditors and treats them as spendthrift trusts even though you funded them. Exceptions apply to contributions made within 90 days before a claim, contributions that are voidable transfers, and orders enforcing child support, spousal support, or a qualified domestic relations order.
Does holding our house as husband and wife protect it in New York?
It helps. A deed to a married couple creates a tenancy by the entirety under New York law unless the deed says otherwise. A creditor of only one spouse generally cannot force a sale of the home during the marriage, and if the debtor spouse dies first the surviving spouse takes the property free of that creditor. The protection does not apply to joint debts and ends on divorce.
Is a Wyoming or Nevada LLC better than a New York LLC for protecting New York property?
Usually not in the way it is marketed. An out-of-state LLC that owns New York real estate must register with the New York Department of State as a foreign LLC, complete New York’s publication requirement, and will face New York law in a New York court on many of the questions that matter. New York LLCs offer charging order protection for members. We evaluate out-of-state entities case by case rather than as a default.
What is the New York LLC publication requirement?
Under current law, within 120 days after its articles of organization take effect, a New York LLC must publish a notice of formation once a week for six consecutive weeks in two newspapers designated by the county clerk of the county where its office is located, then file a certificate of publication with the Department of State. If it does not, its authority to do business in New York is suspended until the filing is made. The same rule applies to out-of-state LLCs that register in New York.
How long can a creditor challenge a transfer under New York law?
Under New York’s Uniform Voidable Transactions Act, a creditor generally has four years from the transfer to bring a claim, or one year from when the transfer was or reasonably could have been discovered if that is later. Transfers made with intent to hinder, delay, or defraud creditors, or made without fair value while insolvent, are the ones at risk. This is why planning must happen before a claim exists.
Is life insurance protected from creditors in New York?
New York’s Insurance Law protects life insurance proceeds payable to a third-party beneficiary from the creditors of the policy owner, and protects annuity benefits payable to the person who funded the annuity from execution, subject to a court’s power to order installment payments to a creditor. The protection depends on who owns the policy and who is named as beneficiary, so designations should be reviewed as part of the plan.
What is the difference between asset protection and a Medicaid asset protection trust?
Asset protection planning aims at lawsuits and creditors. A Medicaid asset protection trust is an irrevocable trust designed to remove assets from your countable resources for long-term care Medicaid after a look-back period. Both involve giving up ownership, but the drafting, tax treatment, and timing differ, and a trust built for one purpose may not serve the other. We often address both in the same plan.
Can I protect my assets if I have already been sued in New York?
Options narrow sharply once a claim exists. Transfers made after you know of a claim invite a voidable transaction action and can expose you and the recipient to additional liability. What you can still do is understand which assets are already exempt, make sure insurance is responding, and avoid steps that make the situation worse. We will give you a candid assessment.
