Asset Protection and IRAs
I have a doctor who is super concerned (more like paranoid) about being sued.
He has 2m in an IRAs (1 traditionat with 1million and 1 r/o with 1million) and 300k in a 401k. He owns homes in DE and NY. He primary residence is Delaware and he practices in De.
Should he be concerned about the IRA being subject to litigation? I know that Delaware does have some protections for IRA assets but the Federal law doesn’t. So I assume that if he was sued by a Delawarean he would be ok but if that person files suit in NY or PA for some reason, does he have the protection?
My initial recommendation was to put everything into the qualified plan to take all the risk away.
Your thoughts would be appreciated?
Mike Sicuranza
Permalink Submitted by Alan Spross on Tue, 2011-02-22 18:26
Acquiring ERISA protection will always be more secure than depending on state exceptions or the fed BK Act. But NY and DE provide good IRA protection, PA not quite as good per following chart. The federal law requires a BK filing also, which may not be acceptable to him:
http://www.creditorexemption.com/