IRA Financial Group, the leading provider of “checkbook control” self-directed IRA LLC structures announces the introduction of the “Self-Directed IRA LLC 401(k) Asset Protection Plan.” The “Self-Directed IRA LLC Asset protection Plan has been created to offer asset and creditor protection to retirement investors. “Because retirement accounts have become many Americans most valuable assets, we believe it is extremely important that our retirement clients have the power to protect their hard earned retirement funds from creditors or potential creditors, “ stated Adam Bergman, a tax attorney with the IRA Financial Group.
Like 401(k) qualified plans, The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA” or the “Act”) effective for bankruptcies filed after October 17, 2005, gave protection to a debtor’s IRA funds in bankruptcy by way of exempting them from the bankruptcy estate. The general exemption found in section 522 of the Bankruptcy Code, 11 U.S.C. §522, provides an unlimited exemption for IRAs under section 408 and Roth IRAs under section 408A. IRAs created under an employer-sponsored section 408(k) simplified employee pension (a “SEP IRA”) or a section 408(p) simple retirement account (a “SIMPLE IRA”), as well as pension, profit sharing, or qualified section 401(k) Plan wealth transferred to a rollover IRA.
According to Mr. Bergman, Traditional and self-directed Roth IRA s that are created and funded by the debtor are subject to an exemption limitation of $1 million in the aggregate for all such IRAs (adjusted for inflation and subject to increase if the bankruptcy judge determines that the “interests of justice so require”). It is understood that a rollover from a SEP or SIMPLE IRA into a rollover IRA receives only $1 million of protection since such a section 408(d)(3) rollover is not one of the rollovers sanctioned under Bankruptcy Code section 522(n).
Outside of bankruptcy, in the case of a self-directed IRA LLC state law determines whether IRAs (including Roth IRAs) are shielded from creditors’ claims. “Most states provide full asset and creditor protection for self-directed IRA assets, “ stated Mr. Bergman. According to Mr. Bergman there are several notable states that do not provide full asset and creditor protection to self-directed IRA assets, including California and Wyoming.”
The use of a limited liability company (LLC) wholly owned by a Self-Directed IRA generally offers additional limited liability protection to retirement investors seeking stronger asset and creditor protection. “The LLC adds another layer of protection to help shield your retirement funds outside of the LLC from creditor attack, ” stated Mr. Bergman.
IRA Financial Group is the market’s leading provider of “checkbook control” self-directed IRA LLC retirement solutions. IRA Financial Group has helped thousands of clients take back control over their retirement funds while gaining the ability to invest in almost any type of investment, including real estate without custodian consent.
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