Hi,
I want to purchase an umbrella policy to protect our assests against personality liability claims. I want to protect real estate and investments.
We are retired.
If a judgement was made against me, would my (our) 401(k)s be at risk? Are social security payments at risk?
We have other non-401(k) investments (cash and muni bonds) that I assume would be at risk, as real estate would be at risk, too.
TIA
This is really more of a question for a bankruptcy lawyer than a tax professional. The answer to your question is, maybe. Each state has its own rules on what is or is not exempt from creditors. In some states retirement funds are exempt. That may not be the rule in every state. You need to talk to someone familiar with insolvency law in your state.
"Stuart O. Bronstein" snipped-for-privacy@lexregia.com wrote in news:XnsAD0D6C37D565Espamtraplexregiacom@130.133.4.11:
Thanks, Stu.
Yes, it is a question for an insolvency lawyer, with whom I plan to pursue.
But should delinquent federal taxes and tax liens be at issue, see this section of the Internal Revenue Collection Manual regarding levy of IRAs, Social Security, etc.:
401(k) plans are covered by the 1974 federal law known as ERISA. As such, except for an IRS tax lien, creditors have no access to them. The IRS can also go after an IRA for taxes owed. Whether a creditor can go after your IRA varies by state. The following link has info on just this subject by state:
Alan snipped-for-privacy@vacationmail.com wrote in news:s5qib5$9e8$ snipped-for-privacy@dont-email.me:
Thanks, Alan,
My concerns is not tax liens, as I'm always ok with the IRS and my state, I was just wondering about things like slip and fall suits in my home or in my short-term-rental property. For my state, I'll have to contact an attorney, as the per the chart.
I will contact an attorney.
Thanks again.
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