Florida Debtor’s IRA Garnished In Another State, Again
I consulted with an asset protection client who was moving to Florida from Tennessee where he had previously set up an IRA with a bank’s investment department. I suggested that the client relocate the IRA to a Florida financial company or open an IRA with a national financial firm at its Florida office.
After our initial meeting, the client reviewed my asset protection plan with his general business attorney. He reported that his attorney advised him that it was not necessary to relocated the IRA because it would be exempt after the client became a Florida resident. The client and his attorney thought I was being overly cautious.
I have written on this blog and on my asset protection website that while many courts in other states would recognize the exemption afforded Florida residents for their IRAs and pension plan when the account was set up in the other state, there are court decisions which state that Florida exemptions do not apply to out-of-state assets.
Here is another story. Another client has already moved to Florida from South Carolina. He opened an IRA in South Carolina. He had a long-standing relationship with his South Carolina financial advisor and was reluctant to move the IRA account. A judgment creditor served a writ of garnishment on the South Carolina financial firm and they froze the account. The financial firm accepted the writ of garnishment even though the IRA owner has moved to Florida. This client has to go to South Carolina court and convince the judge that his IRA should be unfrozen because he has moved from South Carolina to Florida.
These out-of-state garnishments of Floridians’ IRAs and pensions do not happen often, but they do happen. The case is South Carolina is not the first instance I’ve seen. Florida exemptions cannot be exported and applied in other states. If you plan to move to Florida for asset protection purposes you should bring with you everything you own that can be moved.
Last updated on May 22, 2020