Asset Protection / Bankruptcy / Creditor Claims

[austin3515]

Is there a chart in existence a Relius / McCay Hochman, etc., that compares the differences between IRA's and 401(k)'s with respect to how effective they are at protecting assets?

This is a question that comes up a lot, and now I have one specifically related to tax liens. Now, I have been very clear that I can't give legal advice on the matter, but I did say I would check and see if I could find an article on the topic.

[My 2 cents]

I can't give legal advice either. That said, I think that federal tax liens can apply to 401(k) balances. Only federal tax liens and QDROs. Nothing else. Not sure what the rules are for IRAs.

Of course, under most circumstances, 401(k) assets are protected from the reach of bankruptcy courts.

[Lou S.]

IRAs got some expanded federal protections a few years ago. PPA maybe(??) but they still fall mostly under state law which can vary significantly as I understand it.

If I remember right the IRS changed the rules EGTRRA maybe(??) allowing IRS tax liens to grab qualified plan assets and not violate the anti-alienation provisions of 401(a)(13).

But I am not a lawyer nor should this be construed as legal advice.

[austin3515]

If only there were a nice chart explaining this all...

[A Shot in the Dark]

Austin:

I am not aware of a chart, but the AICPA did an excellent article about this subject in their January 2014, Tax Advisor publication. The article discusses qualified plans versus IRA's versus Inherited IRA's.

[austin3515]

Is that available on the intnernet?

[A Shot in the Dark]

Yep. I just did a google search "creditor protection qualified plans versus IRAs" and it popped up.

[Lou S.]

google is your freind

http://www.aicpa.org/Publications/TaxAdviser/2014/January/Pages/naegele_jan2014.aspx

[austin3515]

http://www.aicpa.org/Publications/TaxAdviser/2014/January/Pages/naegele_jan2014.aspx

THANKS!!