Are IRAs Protected from Creditors?

Yes, in Florida, IRAs (Individual Retirement Accounts) are protected from creditors. Florida law offers some of the most extensive protections for retirement accounts in the country.

How Florida Law Protects IRAs

Florida Statute 222.21 protects traditional IRAs, Roth IRAs, and other retirement accounts like SEP and SIMPLE IRAs from creditor claims.

This means that even if you are sued or have a judgment against you, your IRA assets cannot be taken. These protections apply even in bankruptcy so long as the bankruptcy applies Florida exemptions.

Are Inherited IRAs Protected?

Yes, inherited IRAs are protected from creditors in Florida. Florida law treats inherited IRAs similarly to traditional and Roth IRAs, granting them protection against creditor claims.

Florida is one of the few states that specifically exempts inherited IRAs from judgment collection.

Are Self-Directed IRAs Protected from Creditors?

In Florida, self-directed IRAs are protected from creditors. However, that protection can be lost if the account fails to comply with the IRS requirements for self-directed IRAs.

Exceptions to IRA Protection

Even though Florida law protects IRAs from creditors, there are still exceptions in family law cases.

In a divorce, IRAs may also be divided as part of a marital settlement.

Furthermore, fraudulent activity involving an IRA can lead to a loss of its protection. For example, if a judgment debtor fraudulent transfers non-exempt assets into an IRA, a creditor could seek an order permitting the creditor to garnish the IRA account regardless of the statutory protection.

About the Author

Gideon Alper is an attorney who specializes in asset protection planning. He graduated with honors from Emory University Law School and has been practicing law for almost 15 years.

Gideon and the Alper Law firm have advised thousands of clients about how to protect their assets from creditors.