Are Withdrawals From Retirement Accounts Protected?
A called asked about protection whether proceeds withdrawn from tax qualified retirement plans remain protected afer the money is out of the retirement plan. Florida statutes protect IRAs, 401k plans, and other tax qualified plans. If the retiree has a judgment against him the creditor cannot reach money so long as it is held within the plan. In most cases, withdrawals from these plans are deposited in the retiree's personal bank accounts. While proceeds withdrawn from annuities remain protected so long as they are traceable, the same may not be true for retirement proceeds. An good argument can be made that retirement money is protected after withdrawal, but the case law is inconclusive. Presently, retirees concerned about continued asset protection of retirement benefits should develop an asset protection plan which includes a financial account or legal entity to safeguard retirement withdrawal. Conveyance of retirement money directly to another entity should not be vulnerable to fraudulent conveyance attack as long as the retiree does not hold title individually after withdrawal and before the conveyance.
