Tag Archives: Retirement Plans

IRA Exemptions: Supreme Court Settled the Matter?

Howard Rosen, Esq. & Patricia Donlevy-Rosen, Esq.   April 1, 2005   Comments Off on IRA Exemptions: Supreme Court Settled the Matter?

On April 4, 2005, the United States Supreme Court handed down its decision in Rousey v. Jacoway, a case addressing the issue of exempting individual retirement accounts (IRAs) from federal bankruptcy proceedings. The decision was widely hailed in the financial press, with such headlines as “High Court Rules IRAs Untouchable – Unanimous Decision Means Retirement Savings Are Protected From Creditors”.

Are Retirement Plans Really Protected?

In our September 1992 issue (AP NEWS, Vol. I, No.2) we reported that the U.S. Supreme Court, in Patterson v. Shumate, had resolved the national controversy regarding whether qualified retirement plan interests were reachable by creditors by its unanimous holding that such interests were protected.

Florida Exemption Planning

Exemptions are provided by the laws of each state in order to protect specified property interests from being reached by creditors and bankruptcy courts. Each state may adopt its own exemption laws, or may choose to adopt the federal bankruptcy exemptions, or may permit its residents their choice.

Supreme Court Settles Retirement Plan Controversy

The U.S. Supreme Court recently settled a conflict among the Circuit Courts regarding the question of whether a creditor can reach a debtor’s qualified retirement plan interests to satisfy his claim. InPatterson v. Shumate, a unanimous Court held that a participant’s interest in an ERISA qualified retirement plan is protected from the claims of his creditors in bankruptcy.