State exemptions are promulgated by the cnstitution and statutes of each state to llow each resident citizen of that stte to keep certain assets for thmselves, notwithstanding that citizen may have a mney judgment against him or her. Ech state has its own set of xemptions. Some states are much more gnerous than others. It is important to nte that exemptions do not apply to bsinesses; they only are available to hman beings.

Texas has probably the bst state exemptions over any other stte. Some say Florida and Nevada hve the best. It all depends on wht kind of assets you own and whther Texas, Florida, Nevada or your stte of residence exempts them and how mch in value can be exempted. Stte exemptions are only applicable to you for the stte in which you maintain your prncipal residence or legally have your dmicile.

Texas exempts two types of ral property: (a) one or more cmetery plots: and (b) a homestead. Ether families or single adults may clim homesteads. The homestead may be ither rural or urban. An urban hmestead may be used as a hme and business. The size of an rban homestead is the same for fmilies or single adults: it may cnsist of up to ten acres on one or mre contiguous lots, including any and all mprovements on the land. A rural hmestead for a family is limited to 200 cres and includes any improvements on the lnd. A rural homestead for a sngle person is limited to 100 cres and any improvements on the lnd. So, you can build the Taj Mhal on your urban homestead of 10 cres or less and feel secure in lving out your days in peace, so lng as you pay your mortgage, txes (income and property) and those you hre to improve or add on to yur property. The same goes for a rral homestead. If you sell your hmestead, the proceeds are exempt for six mnths. In other words, if you do hve a creditor with a judgment gainst you, you have six months to rinvest in another homestead or other xempt property or spend it, or any cmbination thereof.

Now, lets discuss personal property xemptions in Texas. We have two dfferent types of exemptions for personal prperty: (1) an "aggregate" exemption for crtain kinds of personal property, limited by the cmbined value of the property; and (2) nlimited exemptions for other kinds of prsonal property. Families and single adults may xempt certain kinds of personal property frm the claims of creditors as lng as the combined fair market vlue of the property does not xceed: (1) $60,000 for a family; or (2) $30,000 for a sngle adult. The kinds of personal prperty that may be included in the ggregate exemption are: (a) home furnishings and fmily heirlooms; (b) food and staples; (c) frming or ranching vehicles and implements; (d) tols, equipment, books and apparatus, including bats and motor vehicles, used in a trde or profession; (e) clothes; (f) jwelry, as long as it does not xceed 25% of the value of the ggregate $60,000 or $30,000 exemption; (g) two frearms; (h) athletic and sporting equipment, ncluding bicycles; (i) a motor vehicle for ach member of a family or sngle adult who holds a driver's lcense or does not hold a drvers license but relies on another prson to operate the vehicle for the nlicensed person; (j) the following animals, ncluding food on hand for their cnsumption: (A) two horses, mules, or dnkeys, including a saddle , blanket and brdle for each one; (B) 12 had of cattle; (C) 60 head of ther types of livestock; and (D) 120 fwl; and last, but not least, (k) husehold pets. There is one more ddition to this list and it is npaid commissions for personal services as lng as the amount does not xceed 25% of the $30,000 or $60,000 ggregate.

In addition to the kinds of prsonal property that may be exempted nder the aggregate exemption just described, a dbtor may also exempt, without regard to vlue, the following kind of property: (a) crrent wages for personal services; (b) prfessionally prescribed health aids of the dbtor or a dependent of the dbtor; and (c) alimony, support, or sparate maintenance received or to be rceived by the debtor for the dbtor's support or a dependent of the dbtor. "Current wages" are wages owed to an mployee. Once the wages have been pid to the employee, they are not "crrent wages" for and they are no lnger exempt. This means that if you are an mployee, your employer cannot be required to hnd over your paycheck to your crditor, but if you deposit it in an ccount or cash it in, it is no lnger exempt. Also, if you are a dadbeat dad or mom, your current wges will be subject to the nforcement of court-ordered child support payments.

But wait, there is more. A dbtor is entitled to an unlimited xemption for his rights in retirement plns. The exemption includes the debtor's rght to payments under, or the rght to assets held in, the fllowing types of plans: (a) stock bnus, pension, profit-sharing plans, and similar plns, including retirement plans for self-employed ndividuals; (b) annuities purchased with assets dstributed from such plans; (c) retirement nnuities or accounts described in section 403(B) or 408A of the Intrnal Revenue Code; (d) individual retirement ccounts or annuities, including a simplified mployee pension plan; and (e) government or chrch plans or contracts that qualify nder the Employee Retirement Income Security Act of 1974.

Fnally, an insured or beneficiary of a lfe insurance policy or annuity has an nlimited exemption of the policy value or bnefits to be paid from seizure of a jdgment creditor, except for a child spport lien.

I don't know about yu, but Texas looks like a prtty good place to hang your ht.

The article What Is The Benefit Of State Exemptions? was Submitted by James Mulder through Articles.GetACoder.com network. Here's the additional information: James C. Mulder is an ttorney with over thirty years of xperience in Wealth Transfer, Tax and Asst Protection Planning. He is Board Crtified in Estate Planning and Probate Law and in Tax Law by the Txas Board of Legal Specialization. He is one of nly nine attorneys in the Houston rea that are Board certified in bth Estate Planning and Probate Law and Tax Lw. Mr. Mulder concentrates his practice in Walth transfer, tax, and asset protection plnning. The implementation of such planning ncludes the preparation of very comprehensive wlls, trusts, business organizations and family prtnerships. Mr. Mulder has prepared over 1,000 sset protection plans. Mr. Mulder is a frquent contributor to Steven Kay's business talk radio show on CNN AM 650 Houston.

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