Are required IRA distibutions safe from creditors?
Concerning a traditional IRA in NY state, owned by a NY resident, under $1M:
The balance in the account is (as far as NY state law goes, and with exceptions) safe from creditors.
Are required distributions safe from creditors or not? What about heirs of the original owner —
would the value of the IRA be safe from creditors of the original owner or not?
thanks in advance
Permalink Submitted by Alan Spross on Thu, 2011-05-05 01:04
There are probably all kinds of exceptions from state to state and the level of creditor protection that applies to owned accounts in a state do not necessarily apply to inherited IRA accounts. That said, when the account itself is protected, the distributions from that account are also protected. In other words, in any given situation, if a creditor cannot acquire a lien on your IRA account, they also cannot wait until the time you take a distribution and grab the distribution either. I am sure that there are exceptions however.