mandatory distributions protected?
Regarding the previous question concerning IRA asset protection in NYS and NJ are distributions also protected once they have been withdrawn from the IRA whether they be required mandatory distributions or other distributions
Permalink Submitted by mk foss on Sat, 2009-04-25 22:53
Once funds have come out of the IRA, they are no different than any other assets of the individual. They could be reached by a law suit.
A law suit cannot compel a person to withdraw retirement funds but can attach funds already withdrawn.
Permalink Submitted by Judy Gross on Sun, 2009-04-26 02:42
How is the IRA assets protected if they lose their 100% exemption status as soon as they are withdrawn? This would seem to constitute zero protection if the funds cannot be used. I thought that I read that in NYS and NJ any distributions maintain their exempt status. Can someone please give me more information on this?
Permalink Submitted by Bruce Steiner on Sun, 2009-04-26 12:38
A forum such as this can be useful for providing general information, but not specific legal advice. But you (or your lawyer if you’re the client rather than the lawyer) might want to look at the following cases:
1. New Jersey v. Pulaasty, 136 N.J. 536, 642 A.2d 1392 (1994).
2. In re Cobb, 231 B.R. 236 (Bankr. D.N.J. 1999).
3. Trucking Employees of North Jersey Welfare Fund v. Colville, 16 F.3d 52 (3d Cir. 1994).
4. Velis v. Kardanis, 949 F.2d 78 (3d Cir. 1991).
5. Guidry v. Sheet Metal Workers Int’l. Ass’n., 10 F.2d 700 (10th Cir. 1993).
You (or your lawyer if you’re the client rather than the lawyer) might also want to want to see if there have been any cases on this that were decided after I looked at this a few years ago.
Finally, you (or your lawyer if you’re the client rather than the lawyer) might want to review your estate planning and the estate planning for your spouse and parents (if either or both of them are living) in light of this situation.
Bruce Steiner, attorney
NYC
also admitted in NJ and FL