Is your IRA protected once you enter into a workout?
Is your IRA protected from creditors during a workout or bankruptcy? A common question for many small business owners facing financial hardship.
That depends on what state you live in. Through research, I have compiled a list of all the states and and their restrictions. Please check to make sure you are covered before you jump into the Workout or Bankruptcy arena.
AL: 100% protection for assets held in a qualified trust. NO ROTH IRA PROTECTION
AK: 100% protected
AR: Protection up to only $20,000
AZ: 100% protected
CA: Limited to the extent reasonably necessary to support
CO: 100% protected
CT: 100% protected
DC: 100% protected
DE: 100% protected
FL: 100% protected
GA: NO ROTH IRA PROTECTION…100% protection for undistributed interests. Distributions to the extent necessary for support.
HI: 100%protection ONLY for funds deposited within 3 years prior.
IA: 100% protected
ID: 100% protected
IL: 100% protected
IN: 100% protected
KS: 100% protected
KY: 100% protected
LA: 100% protected
ME: Limited to the extent necessary for support
MA: Limited to deposits equal to 7% of the debtor’s income produced in the preceding 5 years.
MD: 100% protected
MI: 100% protection for ERISA qualified plans. NO PROTECTION FOR NON-ERISA QUALIFIED PLANS.
MN: Protection limited $60,000
MO: Limited to the extent reasonable to support.
MS: 100% protected
MT: 100% protected
NE: Limited to the extent necessary for support
NV: Limited to $500,000
NH: 100% protected
NJ: 100% protected
NM: 100% protected
NY: 100% protected
NC: 100% protected
ND: Limited to $100,000 per account/ $200,000 max. unless necessary for support.
OH: Limited to the extent necessary for suport.
OK: 100% protected
OR: 100% protected
PA: 100% protected
RI: 100% protected for ERISA qualified plans. NO PROTECTION FOR NON-ERISA QUALIFIED PLANS
SC: Limited to the extent necessary for support.
SD: Limited to $250,000
TN: 100% protected
TX: 100% protected
UT: Protection only for amounts contributed within 1 year
VT: Protection only for amounts contributed to self-directed plans within 1 year.
VA: Limited to annual benefit not to exceed $25,000
WA: 100% protected
WV: 100% protected
WI: Limited to the extent necessary for support.
WY: 100% protected
This information was derived from state laws, which are subject to change.
Your 401K is protected regardless of what state you live in, and many people assume the same rules apply for all IRA account, being that they are similar retirement accounts. A mistake that could cost a defaulted guarantor hundreds of thousands of dollars…. Just another reason not to do your own workouts
Call someone with experience, with a proven strategy, and with access to the knowledge necessary to protect your assets.
For more knowledge, visit www.secondwindconsultants.com, or call our office, 413-584-2581, and speak with Norm to schedule a consultation
