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IRA Creditor Protection by State

Whether you have a traditional IRA, a Roth IRA, or both, you should be aware that the IRA creditor protection statutes and case law vary by state and region. Below is a summary of our research. You can look at the chart below and see the manner in which various states protect IRAs; that is, IRA judgment creditor exemptions by state (at the time of this writing). Additionally, exemptions exist at the federal level that may be different than those at the state level. The use of an IRA may be thought of as a small part of an overall asset protection plan.

Table of IRA Creditor Protection by State

State State Statute IRA Exempt Roth IRA Exempt Comments
Alabama Ala. Code §19-3B-508 Yes Yes
Alaska Alaska Stat. §09.38.017 Yes Yes The Alaska exemption doesn’t include amounts that were contributed within 120 days prior to the debtor filing for bankruptcy.
Arizona Ariz. Rev. Stat. §33-1126(B) Yes Yes The Arizona exemption doesn’t apply to a claim by an alternate payee under a qualified domestic relations order (QDRO). A QDRO is part of a property division in a divorce or legal separation that splits a retirement plan or pension plan between spouses. The interest of an alternate payee is exempt from claims by creditors of the alternate payee. The exemption doesn’t include amounts contributed within 120 days before a debtor files for bankruptcy.
Arkansas Ark. Code §16-66-220 Yes Yes A bankruptcy court has ruled that the creditor exemption for IRAs violates the Arkansas Constitution. This ruling was with respect to contract claims.
California Cal. Code of Civ. Proc. §704.115 Partly No IRAs are exempt only to the extent necessary to provide for the support of the judgment debtor when the judgment debtor retires as well as for the support of the spouse and dependents of the judgment debtor. This takes into account all resources that are likely to be available to support the judgment debtor when the judgment debtor retires.
Colorado Colo. Rev. Stat. §13-54-102 Yes Yes Any retirement benefit or payment is subject to attachment or levy in satisfaction of a judgment for back child support. Any pension or retirement benefit is also subject to attachment or levy in satisfaction of a judgment awarded for a felonious killing.
Connecticut Conn. Gen. Stat. §52-321 a Yes Yes
Delaware Del. Code Ann. tit. 10, §4915 Yes Yes An IRA is not exempt from a claim made under Title 13 of the Delaware Code, which is the title that pertains to domestic relations orders.
Florida Fla. Stat. §222.21 Yes Yes An IRA is not exempt from a claim of an alternate payee under a QDRO or claims of a surviving spouse pursuant to an order determining the amount that a surviving spouse of a deceased may claim as well as and contribution to the IRA. Florida provides a specific exemption for inherited IRAs.
Georgia Ga. Code §44-13-100 Yes No Distributions from IRAs are exempt only to the extent necessary for the support of the debtor and any dependent.
Hawaii Haw. Rev. Stat. §651-124 Yes Yes The exemption does not apply to contributions made to a plan or arrangement within three (3) years before the date of a bankruptcy or a civil action is initiated against the debtor.
Idaho Idaho Code §55-1011 Yes Yes The exemption only applies to claims of judgment creditors of the beneficiary or participant arising out of a negligent or otherwise wrongful act or omission of the beneficiary or participant resulting in money damages to the judgment creditor.
Illinois 735 III. Comp. Stat. 5/12-1006 Yes Yes
Indiana Ind. Code §34-55-10-2(6) Yes Yes
Iowa Iowa Code §627.6(8) Yes Yes
Kansas Kan. Stat. §60-2308 Yes Yes
Kentucky* Ky. Rev. Stat. §427.150(2)(f) Yes Yes The exemption doesn’t include any amounts contributed to the IRA if the contribution occurred within 120 days before the debtor filed for bankruptcy. In addition, the exemption does not include the right or interest a has person in an IRA to the extent that right or interest is subject to a court order for payment of maintenance or child support.
Louisiana La. Rev. Stat. §§20-33(1) and 13-388KD) Yes Yes No contribution to an IRA is exempt if made less than one calendar year from the date of filing bankruptcy. This applies whether the filing was voluntary or involuntary, or the date writs of seizure are filed against the account. Additionally, the exemption doesn’t apply to liabilities for alimony and child support.
Maine Me. Rev. Stat. tit. 14, §4422(13)(F) Partly No IRAs are exempt only to the sum of $15,000 or to the extent reasonably necessary for the support of the debtor and any dependent(s).
Maryland Md. Code Cts. & Jud. Proc. §11-504(h) Yes Yes IRAs are exempt from any and all claims of creditors of the beneficiary or participant other than claims by the Department of Health and Mental Hygiene.
Massachusetts Mass. Gen. Laws ch. 235, §34A Yes Yes The exemption doesn’t apply to a court order that includes divorce, separate maintenance or child support. It also does not apply to a court order requiring an individual convicted of a crime to satisfy a monetary penalty or to make restitution, or sums deposited in a plan in excess of 7% of the individual’s total income within five years of his or her declaration of bankruptcy or entry of judgment.
Michigan* Mich. Comp. Laws §600.6023(j) Yes Yes The exemption does not include amounts contributed to an IRA or individual retirement annuity if the contribution occurs within 120 days before the debtor files for bankruptcy. Addtionally, the exemption does not apply to an order of the domestic relations court or nondeductible contributions to an IRA.
Minnesota Minn. Stat. §550.37(24) Yes Yes Exempt to a present value of $69,000 and additional amounts reasonably necessary to support the debtor, spouse, or dependents.
Mississippi Miss. Code §85-3-1 Yes No
Missouri Mo. Rev. Stat. §513.430.1 Yes Yes If a Ch. 11 bankrputcy is filed by or against the debtor, no amount of the funds are exempt in the proceedings under any plan or trust that is fraudulent as defined in Section 428.024 of the Missouri Revised Statutes, and for the period such person participated within three years prior to the Ch. 11 filing.
Montana Mont. Code §31-2-106(3) Yes No The exemption doesn’t include the portion of contributions made by the individual within one year before the filing bankruptcy that exceeds 15% of the gross income of the individual for that one-year period.
Nebraska Neb. Rev. Stat. §25-1563.01 Partly No The debtor’s right to receive IRAs and Roth IRAs is exempt to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.
Nevada Nev. Rev. Stat. §21.090(1 )® Yes Yes The exemption is limited to $500,000 in present value in an IRA that complies with Sec. 408 or 408A.
New Hampshire N.H. Rev. Stat. 52 §511:2 Yes Yes The exemption only applies to extensions of credit and debts that arise after Jan. 1, 1999.
New Mexico N.M. Stat. §§42-10-1,-2 Yes Yes A retirement fund that supports the IRA holder or another individual is exempt from receivers or trustees in bankruptcy or other insolvency proceedings, fines, attachment, execution, or by foreclosure from a judgment creditor.
New Jersey N.J. Stat. 25:2-1 (b) Yes Yes
New York N.Y.C.P.L.R. 5205(c) Yes Yes Contributoins to IRAs are not exempt from judgments that were made after a date that is 90 days before the filing of the claim from which the judgment was entered.
North Carolina N.C. Gen. Stat. § 1C-1601 (a)(9) Yes Yes There are specific exemption for inherited IRAs.
North Dakota N.D. Cent. Code §28-22-03.1(7) Yes Yes The account must have been opened for a period of at least one year. Each individual account is exempt to a limit of up to $100,000 per account, with an aggregate limitation of $200,000 for all accounts. The dollar limit does not apply to the degree to which the debtor can prove the property is reasonably necessary to support the debtor, spouse, or dependents.
Ohio* Ohio Rev. Code §2329.66(A)(10) Yes Yes Neither SEPs nor SIMPLE IRAs are not exempt. There is a specific exemption for inherited IRAs.
Oklahoma Okla. Stat. tit. 31, §1(A)(20) Yes Yes
Oregon Or. Rev. Stat. §18.358 Yes Yes
Pennsylvania 42 Pa. Cons. Stat. §8124(b)(1 )(ix) Yes Yes The exemption does not apply to amounts added to the retirement fund in excess of $15,000 or within one year prior to the debtor filing for bankruptcy.
Rhode Island R.l. Gen. Laws §9-26-4(11) Yes Yes The exemption doesn’t  apply to a court order assocaited with a judgment of divorce or separate maintenance, nor to a court order concerning child support.
South Carolina S.C. Code §15-41-30 Yes Yes There is a specific exemption for inherited IRAs.
South Dakota S.D. Codified Laws 43-45-16;43-45-17 Yes Yes The code exempts “certain retirement benefits” up to $1 million. Cites Sec. 401 (a)(13). Subject to the right of the state of South Dakota and its political subdivisions to collect any amount owed to them.
Tennessee* Tenn. Code §26-2-105 Yes Yes Not exempt from QDROs.
Texas Tex. Prop. Code §42.0021 Yes Yes There is a specific exemption for inherited IRAs.
Utah Utah Code §78-23-5(1 )(a)(xiv) Yes Yes The exemption doesn’t include amounts contributed or benefits accrued by or on behalf of a debtor within one year before the debtor files for bankruptcy.
Vermont Vt. Stat. tit. 12, §2740(16) Yes Yes Nondeductible traditional IRA contributions as well as earnings are not exempt.
Virginia Va. Code §34-34 Yes Yes IRAs are exempt from creditor process to the extent allowed by federal bankruptcy law. An IRA isn’t exempt from a claim from child support or from spousal support.
Washington Wash. Rev. Code §6.15.020 Yes Yes
West Virginia W.Va. Code §38-10-4 Yes No
Wisconsin Wis. Stat. §815.18(3)(j) Yes Yes The exemption doesn’t include to a court order concerning child support, family support, or maintenance, or any judgments of annulment, divorce, or legal separation.
Wyoming Wyo. Stat. §1-20-110 Partly Partly Exempt to the extent payments are made to the fund while solvent.
* In Kentucky, Michigan, Ohio, and Tennessee, the Sixth Circuit ruled in Lampkins v. Golden, 28 Fed. Appx. 409 (6th Cir. 2002) that a Michigan statute that exempts SEPs and IRAs from claims of creditors is preempted by the Employee Retirement Income Security Act (ERISA), therefore, a SEP IRA was subject to state law garnishment. The decision seems to be restricted to SEPs and SIMPLE IRAs.

Additional Creditor Exemptions

Other types of exemptions to protect you from lawsuits include the homestead exemption, that shields some or (rarely) all of the equity in your home. There are tenancy by the entirety states that offer some judgement protection. Then, there are the ones that expose married couples to greater risk such as the community property states. Another interesting option for the residents of one state that keeps creditors at bay is the California Secure Choice Retirement Savings Program.

Legal Disclaimer

The above is for informational purposes with respect to IRA creditor protection by state and is not to be considered tax or legal advice. The author believes it is accurate at the time of its writing but the author or associated parties make no guarantees of such. If such advice is needed, seek the services of a qualified, licensed, practicing attorney and/or accountant.