Most withdrawals or distributions from retirement accounts can be protected even after being deposited into a bank account. The protection is dependent on state law and proper asset protection design. IRA, Pension and 401k Retirement Plans Retirement accounts are generally protected from creditors under Florida law. Florida statute 222.21 protects IRAs, 401k plans,…
Suppose an employee has a stock purchase plan with his employer under IRS Code 423. The employer’s stock is publically traded. The plan gives the employee the option to receive stock in the employer company at a discount to the then-current market value. The value of the discounted stock is…
A client wanted to know whether his commissions would be exempt from garnishment as head of household income even though the commissions were paid on a 1099 and the client was considered an independent contractor. What is the Head of Household Exemption? Florida Statute 222.11 exempts from garnishment any earnings…
The general rule is that Florida residents cannot export Florida asset exemptions to other states. Therefore, out of state, or “foreign” judgments pose unique risks to judgment debtors living in Florida. Even though the judgment debtor lives in Florida, the judgment creditor could start judgment collection proceedings in the foreign…
Some debtors are surprised when I tell them that the household furnishings and clothing they used on a daily basis are not exempt from their judgment creditors. Some people think that Florida law permits them to own their basic tools of living such as the clothes they wear, their children’s…
One of my new clients had been sued by the Federal Trade Commission for a violation of their statutes pertaining to telephone sales including alleged common law fraud against the victims. A federal court entered a judgment against my client for several millions of dollars damages including an award of…
A married couple came to see me about a foreclosure on their homestead. The man bought a Florida homestead where he lives with his wife. There is a judgment against the husband. He paid cash for the homestead in order to protect the purchase proceeds. The husband used his own…
Exemption of a debtor’s interest in ESOP plans depends upon statutory provisions and the terms of the company’s written plan documents. One of my clients asked me to evaluate his interest in an ESOP containing stock from Publix. He had accumulated Publix stock in an ESOP through his employment with…
A new client invested in a ponzi scheme. He withdrew his investment, including a “profit” just before the ponzi scheme collapsed. The SEC appointed a receiver to go after investors who received profits as fraudulent transfers. Many courts have held that ponzi profits are fraudulent transfers that may be recovered…
Client lives in California and has purchased a Virginia based 529 college savings. His financial adviser told him that Virginia plans offer advantageous investment options. The client says that Virginia law provides that Virginia 529 plans are exempt from creditor claims. The clients asks about the protection of his Virginia…
