THE SAUGUS ADVOCATE – FriDAy, AUGUST 19, 2022 Page 15 SCHOOL SPORTS | FROM PAGE 14 CREDITORS AND RETIREMENT ACCOUNTS M any debtors are worried about a creditor’s ability to satisfy a judgment by attaching his or her retirement account. A qualified retirement account established pursuant to the Employee Retirement Income Security Act (ERISA) promulgated in 1974 are generally protected in full. These employer-sponsored retirement plans would include a 401K) plan, a 403(b) plan, a 457 plan, profit-sharing plan, cash balance plan and other pension plans. It does not matter how much money you have in a qualified plan under ERISA. These accounts are even protected if you were to file for bankruptcy. There are situations where the assets might not be protected. For example, if you committed a crime, some of the assets might be vulnerable in order to reimburse the state that may have prosecuted you. A spouse in the context of a divorce would also have marital rights that would allow that spouse to gain access to a portion of the retirement account. The IRS would also have the ability to reach assets in a qualified plan in order to seek recovery for back income taxes. Traditional IRA’s and Roth IRA’s are not protected by the federal government under ERISA. However, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 provides federal protection to IRA accounts up to $1,362,800. Monies rolled over from an ERISA qualified retirement plan into a “rollover” IRA account may not be subject to these limits. There are restrictions with respect to IRA contributions within the five-year period prior to filing for bankruptcy that are in excess of 7% of your income. Also, it is important to note that “inherited” IRA’s are not protection assets. If you are not filing for bankruptcy, each state has its own limits as to how much in an IRA account would be protected from creditors. Be sure to achievement. • Promotes respect, integrity and sportsmanship. • Prepares for the future in a global community. • Develops leadership and life skills. • Fosters the inclusion of diverse populations. • Promotes healthy lifestyles and safe competition. • Encourages positive school/ community culture. • Should be fun. And it is far from being a budget-buster! In the long run, as it keeps students in school and working towards dreams and goal, it naturally makes the school budget-funded districts more effective and more successful. If students are now involved in school-based athletics and activities, keep them involved. If they are not participating at this time, get them involved! Being active in school-based athletics and/or activities can and will change and enhance student-athletes’ lives. consult with an attorney fully versed in creditor protection rights and bankruptcy law if you are unsure as to whether or not your qualified retirement account, IRA or SEP/IRA account is protected. This area of the law can be very confusing. Joseph D. Cataldo is an estate planning/elder law attorney, Certified Public Accountant, Certified Financial Planner, AICPA Personal Financial Specialist and holds a master’s degree in taxation.
16 Publizr Home