Although most people’s IRAs consist of cash and marketable securities housed at a financial institution people may own real estate in an IRA that is “self-directed.” There are financial companies that set up and administer for a fee self-directed IRAs which allow the owner to buy a wide variety of assets including real estate, currencies, precious metals and commodities.
A caller residing in Florida asked whether he could protect from creditors a property purchased in North Carolina if the deed were held by his self-directed IRA.. Real estate is a particularly local asset- real estate is most respects is governed by the laws of the jurisdiction where the real estate is located.
Florida’s statutory exemption of IRAs and other qualified plans applies to all varieties of IRAs including standard, simple, Roth and inherited plans. The statute does not distinguish IRA assets by their location.
In my opinion, the caller’s self-directed IRA would be exempt from creditors including the real property notwithstanding that the property is located in another state. However, a North Carolina judgment creditor may try to get his local courts to put a lien on the property, possibly arguing that the Florida debtor may not export his IRA exemptions to North Carolina. As a practical matter, the debtor might have to fight to protect the asset.