Texas Asset Protection
Texas asset protection runs through three separate legal tools, not one all-purpose trust the way a handful of other states offer. A properly maintained Texas LLC gives a judgment creditor of the owner exactly one way to reach the owner's stake in the business, under Business Organizations Code Section 101.112. The homestead exemption protects a qualifying home from an ordinary creditor's judgment with no dollar cap on the home's value at all, under Property Code Section 41.001. And Property Code Section 42.001 exempts a defined list of personal belongings from seizure up to a dollar cap. Each tool covers a different kind of asset, and most complete plans in Texas end up using more than one of them at once.
This page is the index for every asset protection topic on this site, and it also answers the question readers usually ask before any of the others: does Texas allow a self-settled asset protection trust? It does not, and that answer shapes everything below — the tools that follow are what Texas offers instead, each covered in full on its own page.
Texas Asset Protection Topics
Available now:
- Texas Charging Order
- Texas Homestead Protection
- Texas Exempt Assets
- Does Texas Allow Asset Protection Trusts?
LLC Charging Order Protection — Business Organizations Code §101.112
When someone wins a money judgment against the owner of a Texas LLC personally, Business Organizations Code Section 101.112 gives that judgment creditor exactly one way to reach the owner's stake in the company: a court may charge the membership interest to satisfy the judgment, and the creditor's right stops at receiving distributions the owner would otherwise have gotten — no vote, no seat at the table, no say in how the business is run. Section 101.112(c) calls that charging order a lien, and the same subsection says the lien may not be foreclosed on under the Business Organizations Code or any other law, so the creditor cannot force a sale of the interest or a liquidation of the company to cash it out. Section 101.112(d) makes the charging order the exclusive remedy for reaching a membership interest, and Section 101.112(g) extends that same protection to single-member LLCs, with no second owner required. See our Texas Charging Order page for the full subsection-by-subsection breakdown, including what the statute does not cover.
The Homestead Exemption — Property Code §41.001–§41.002
Separately from any entity, Texas protects a homeowner's residence from an ordinary creditor's judgment automatically, with no LLC, trust, or filing involved. Property Code Section 41.001 exempts a qualifying homestead from seizure for the claims of creditors, with narrow exceptions for debt the owner voluntarily secured against the home itself — purchase-money debt, property taxes, a properly contracted mechanic's lien, and a short list of others. Section 41.002 measures the exemption in acreage rather than dollars and sets no ceiling on the home's value: up to 10 acres for an urban homestead, and up to 200 acres for a rural family homestead or 100 acres for a single adult not otherwise entitled to one. The exemption covers exactly one property — the one the owner actually lives in. See our Texas Homestead Protection page for what does and doesn't qualify.
Exempt Personal Property — Property Code §42.001
A separate statute protects a defined list of personal belongings, independent of both the LLC and the homestead exemption. Property Code Section 42.001 exempts personal property described in Section 42.002 from garnishment, attachment, execution, or other seizure, up to an aggregate fair market value of $100,000 for property provided for a family or $50,000 for property owned by a single adult who isn't a member of a family — both figures measured exclusive of any liens or security interests on the property. Retirement and savings accounts sit in a separate, larger, uncapped category under a different section entirely, on top of this exemption rather than counted against it. See our Texas Exempt Assets page for the full list of what qualifies and what falls outside it.
Texas Has No Self-Settled Asset Protection Trust
A domestic asset protection trust lets someone fund a trust for their own benefit and still keep it out of their own creditors' reach — and Texas doesn't allow that structure. A spendthrift provision in a Texas trust protects what a settlor leaves to someone else; it does not protect what the settlor keeps for themselves by routing it through a trust they also benefit from, regardless of how carefully the trust is drafted. Readers who specifically want a self-settled trust have to look to a state that allows one — Wyoming is among the most established, and this site mirrors that Wyoming structure for readers who want it. See our Does Texas Allow Asset Protection Trusts? page for the statute and the full explanation, or Wyoming Asset Protection Trust for the out-of-state structure itself.
Building a Complete Plan
None of these tools substitutes for the others, because none of them protects the same kind of asset. The homestead exemption and the personal-property exemption are both automatic and require no paperwork, but they're also both limited — one to a single home, the other to a fixed list of belongings up to a dollar cap. An LLC's charging-order protection covers everything the exemptions don't reach — rental property, a brokerage account, a growing business — but only if the LLC is formed correctly and actually kept separate from personal finances. Most Texans end up needing more than one of these tools at once, not a single trust doing all the work. See our Asset Protection Strategies page for how to put an LLC-based plan together in practice.
Related Texas LLC Resources
A number of closely related asset-protection topics are already live on this site: