bobbyrx wrote:Most of these very useful links refer to protection from bankruptcy but how does this overlap with protection from creditors without bankruptcy as an exempt asset as a result of litigation? Is an rollover IRA protected from creditors up to $1 million as a result of Federal legislation that supercedes individual State law? I think there is but I am not sure- anyone?
A few comments based on my understanding which could be wrong so appreciate any corrections:
1) I believe a rollover IRA from an ERISA qualified plan e.g. 401K has unlimited protection (but only in bankruptcy)
2) The $1M you mentioned is for a normal IRA not from a qualified plan (again only in bankruptcy)
3)I think when you have both state and Federal protections,
the stronger one prevails? (but note that not just the $$$ amount is involved but also whether you have to file bankruptcy or not.........having to file bankruptcy makes it a weaker protection than not having to).
Albedo....thanks for starting this thread on a topic near and dear to my heart. I have come to the same conclusion that you have since I also live in one of the big 6 states you mentioned......until someone convinces me otherwise. This seems to be a dusty corner eliciting yawns and confused looks when mentioned. I am especially surprised that similar reactions come from financial planners......well, maybe not since they gain nothing if you stay in the ERISA plan. Funny how the brain works (at least mine). I walked by this thread all day yesterday and never thought of opening it till today but would have jumped on it immediately if I had seen "creditor protection" instead of "safe".