Inhterited IRA Now Protected In Florida After Legislature Passes New Law
Think what you may about the politics of Florida’s legislature and our new governor, but the seem to be pretty good about fixing bad court decisions. I wrote blog posts previously about more than one Florida court decision finding that a debtor’s IRA inherited from another family member, excluding spouses’ rollover, was not exempt from the debtor’s creditors because the IRA represented an inheritance rather than the debtor’s own retirement savings.
Legislature to the rescue. Florida statute section 222.21 will be amended to specifically included inherited IRAs as well as rollover IRAs. You can read it here. The bill is retroactive so it does not matter if the IRA was established or inherited before this bill becomes law. Also, the bill is applicable to IRAs owned by Florida residents even if the deceased owner lived elsewhere.
To be safe, if you inherit an IRA you may want to move the IRA account to a Florida branch of the IRA custodian. If the decedent lived in another state and had his IRA account maintained at an office in his home state a creditor could argue that the exemption laws applicable to your inherited IRA are the laws of the state where the inherited IRA account is maintained.
