Randy Watson Posted December 12, 2008 Share Posted December 12, 2008 I'm curious what others think about the impact, if any, of an employer getting a creditor to agree not to pursue "assets" in a rabbi trust in the event of the employer's insolvency. Would this separate agreement somehow make this a funded trust in the eyes of the IRS since the trust assets would no longer be subject to the employer's creditors? Link to comment Share on other sites More sharing options...
Guest Moona Posted December 12, 2008 Share Posted December 12, 2008 It would certainly make me uncomfortable. Link to comment Share on other sites More sharing options...
J Simmons Posted December 12, 2008 Share Posted December 12, 2008 Moona's discomfort would certainly be justified. The one creditor that this exception would be negotiated with would likely be the biggest creditor, the one for which the participating employees have the most concern raiding the general assets of the employer and thus want this negotiated. And by eliminating such a creditor's ability to go after those modified Rabbi trust assets, you'd be decreasing the risk of forfeiture--likely below the substantial level. John Simmons johnsimmonslaw@gmail.com Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation. Link to comment Share on other sites More sharing options...
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