Creditor Protection for IRA Rollover

Submitted by Jonathan Sard on Mon, 2014-11-10 21:07

A physician will be terminating his company 401k plan. His personal balance is 1.9M. If he rolls the money into his own IRA, will the 1.9M retain full creditor protection in the event of a lawsuit? My understanding is that he would receive full protection on the 1.9M if we can show those dollars came from a qualified plan, but I seem to see conflicting information regarding the 1M exemption on IRAs. He resides in the state of Georgia.

Thank you!



Submitted by Alan - IRA critic on Mon, 2014-11-10 22:56

The following is from a noted asset protection site:

Exemption for Tax-Qualified Retirement Plans, IRAs & Roth IRAs (Note 2): 100% for undistributed interests; Georgia Code Ann. § 18-4-22 — Distributions exempt to the extent reasonably necessary for support; No Roth IRA protection. Georgia Code Ann. § 44-13-100(a)(2.1).

Best to discuss with a GA attorey to fine tune what this means. The account is safe under GA law until funds are distributed and then the protection is limited to just the amount needed for support. The main question appears to be whether the creditor can wait until RMDs are required, then file to access those distributions. GA appears to have opted out of the bulk of the federal BK law provisions. A different site just refers to 18-4-22 and states that IRAs are exempt; no mention made about the distributions from the IRA.



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