401k vs. IRA creditor protection
I have a client who is considering a 401k rollover to his IRA but is hesitant to do it if he loses creditor protection. Where can I go to find out what creditor protection covers his ERISA 401k versus an IRA in Minnesota?
Permalink Submitted by Alan - IRA critic on Wed, 2017-02-22 00:19
ERISA protection is equal in all states, but IRA creditor protection varies by state. MN has fairly poor IRA creditor protection since it is limited to the reasonable support needs of the IRA owner, spouse and dependents. The limit is therefore subject per court judgement and could end up being as low as 100k. Note that even ERISA creditor exemptions do not apply to IRS tax liens or marital settlements.