In Massachusetts--are we protected from creditors?

Check Q&A 55 in the ERISA Q&A column.

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Another great site for this info is available thru the Investment company Institute (ICI) at http://www.ici.org/issues/98_state_ira_bankruptcy.html

Here's what they say on MA:
Protection does not apply to deposits made during the 5 years before the bankruptcy filing (including deposits made to plans that were rolled over or transferred to the IRA), except to the extent the deposits do not exceed 7% of the individual's income over the 5-year period. Protection is also not provided from court orders requiring a criminal to pay a monetary penalty or make restitution to victim of the crime.*

Again, a lawyer is the best resource on these issues.

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[This message has been edited by danmar (edited 09-10-1999).]

[This message has been edited by danmar (edited 09-10-1999).]

There is another problem with the Massachusetts statute. The minimal protection it provides applies to "individual retirement accounts". This may mean that only a traditional IRA is covered. Thus, there may be no protection for a Roth. A Massachusetts lawyer's opinion should be sought if this is a problem especially if the person is thinking of rolling substantial funds out of a qualified plan, which is protected more broadly by federal law.

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