How Safe Is Your Pension? Creditor Protection For Retirement Plans And IRAs

• Published in: The Practical Tax Lawyer Vol. 22; no. 2; p. 33
• Main Authors: Naegele, Richard A, Altieri, Mark P
• Format: Trade Publication Article
• Language: English
• Published: Philadelphia American Law Institute 01.01.2008
• Subjects: Bankruptcy Abuse Prevention & Consumer Protection Act 2005-US; Bankruptcy claims; Bankruptcy laws; Compensation plans; Deferred compensation; Employees; Employers; ERISA; Federal court decisions; Pension plans; Personal bankruptcy; Retirement income; Retirement plans; SEP; State laws; Tax exemptions; Taxation; United States > US
• ISSN: 0890-4898

The Bankruptcy Abuse Prevention and Consumer protection Act of 2005 (BAPCPA) brought much-needed clarity to debtor and creditor rights relative to retirement assets in a federal bankruptcy proceeding. Before the BAPCPA, debtor and creditor rights with regard to such assets were in a state of great confusion both within and outside of federal bankruptcy. Assets in qualified retirement plans (pension, profit-sharing, and section 401(k) plans) continue to possess the most extensive debtor protections both within and outside of a bankruptcy proceeding. An IRA into which qualified retirement plan assets are rolled - an asset frequently attacked under pre-BAPCPA bankruptcy law - now constitutes a debtor protected reservoir of wealth in states providing strong IRA protection (such as Ohio) and under the new post-BAPCPA unlimited exemption for such IRAs in a bankruptcy proceeding.