.jpg)
401k rollover to IRA
I would be using 704.115 but it probably won't make a difference since it is an IRA now and it probably will go under the R & N test and won't make a difference that it was a rollover from a 401k.
.
"David A. Tilem" wrote:
The post was migrated from Yahoo.
My rule of thumb is that if the debtor could get the money now, the trustee
would object to the exemption. It is up to the debtor to argue that the money
is necessary for the maintenance and support of the debtor or the debtor's
spouse and dependants.
The trustee would have no problem paying the penalty upon early withdraw and
administering the balance of the money for the estate!
Joseph Ore
debtesq@aol.com
My rule of thumb is that if the debtor could get the money now, the trustee would object to the exemption. It is up to the debtor to argue that the money is necessary for the maintenance and support of the debtor or the debtor's spouse and dependants.
The trustee would have no problem paying the penalty upon early withdraw and administering the balance of the money for the estate!
Joseph Ore
debtesq@aol.com
The post was migrated from Yahoo.
The U.S. Supreme Court is considering this question right now.
Sent: Monday, December 06, 2004 1:47 PM
To: cdcbaa
Subject: [cdcbaa] 401k rollover to IRA
I am about to file a Chapter 7 for a client who is 47 years old and
unemployed with a 401k rollover to an IRA worth about $90,000. This would
be a joint filing with her husband who is not making much money being
self-employed.
Does anyone know if the IRA is still protected because of the original funds
being in a 401k? By the way, there has been no commingling or additions
made to the account since the rollover.
Thanks,
Nate Berneman
_____
Do you Yahoo!?
The all-new My Yahoo! What will yours do?
Yahoo! Groups Sponsor
ADVERTISEMENT
click here
The post was migrated from Yahoo.
The more important answer is that if I am a trustee and the funds were sitting in an IRA not a qualified plan, I would object to the exemption. Given the dollar amount and the debtor's age, I would at least take a run at administering the asset. The ultimate decision would turn on who the judge is.
Larry D. Simons
SulmeyerKupetz
A Professional Corporation
333 South Hope Street, Thirty-Fifth Floor, Los Angeles, CA 90071
Voice: 213.617.5210 Fax: 213.629.4520
Northern California Office:
1080 Marsh Road, Suite 110, Menlo Park, CA 94025
Voice: 650.326.2245 Fax: 650.326.5134
E-Mail: lsimons@sulmeyerlaw.com
URL: www.sulmeyerlaw.com
Sent from my BlackBerry Wireless Handheld
To: cdcbaa@yahoogroups.com
Sent: Mon Dec 06 21:01:17 2004
Subject: RE: [cdcbaa] 401k rollover to IRA
wrote:
> see In re Mooney, 248 B.R. 391
>
Mooney is wrong. Dudley is a 9th Cir Case one year
later.
George and Carmen Dudley fell into a similar trap.
Both had IRA roll overs from qualified pension plans.
$110,271 was in the IRAs at the filing of the case.
The Dudleys had withdrawn $107,000. The trustee's
take, not a retirement use. The bankruptcy court's
ruling. Not exempt. Ninth Circuit held:
The fact that a debtor has withdrawn or will withdraw
sums from an IRA for non-retirement purposes does not
automatically disqualify the debtor from claiming the
amount remaining in the IRA as exempt under
704.115(a)(3). "If the primary purpose is to provide
income for a debtor in retirement, the assets in the
plan should be exempt under 704.115. Otherwise, even
a de minimis depletion of the plan assets would
destroy the exemption, which would be contrary to the
purpose of the exemption statute to preserve income
for retirees." Jacoway v. Wolfe (In re Jacoway),255
B.R. 234, 240, (9th Cir. BAP 2000) (citing In re
MacIntyre, 74 F.3d 186, 188 (9th Cir. 1996) ("The
purpose of the section 704.115 exemption for the
corpus of private retirement plans is to safeguard a
stream of income for retirees at the expense of
bankruptcy creditors.")).We believe the Bankruptcy
Appellate Panel stated the appropriate inquiry in In
re Jacoway.
There is no indication in this case that the
bankruptcy court took into consideration that the plan
could have two purposes, one to supplement current
income, and the other to provide for retirement.
Particularly in light of the liberal construction
given to exemption statutes, see Spencer v. Lowrey,
235 Cal.App.3d 1636, 1639, 1 Cal.Rptr.2d 795 (1991),
where [an IRA] is designed and used for dual purposes,
the court should consider whether the principal
purpose is for retirement or to provide for current
needs. In re Dudley, 249 F.3d 1170, 1176-7 (9th Cir.
2001).
dennis
__________________________________________________
Do You Yahoo!?
Tired of spam? Yahoo! Mail has the best spam protection around
http://mail.yahoo.com
Yahoo! Groups Links
This e-mail message is for the sole use of the intended recipient(s) and may
contain confidential or legally privileged information. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the
intended recipient, please contact the sender by reply e-mail, delete this
message from your computer and destroy all copies of the original message.
Re: [cdcbaa] 401k rollover to IRA
The more important answer is that if I am a trustee and the funds were sitting in an IRA not a qualified plan, I would object to the exemption. Given the dollar amount and the debtor's age, I would at least take a run at administering the asset. The ultimate decision would turn on who the judge is.
Larry D. Simons
SulmeyerKupetz
A Professional Corporation
333 South Hope Street, Thirty-Fifth Floor, Los Angeles, CA 90071
Voice: 213.617.5210 Fax: 213.629.4520
Northern California Office:
1080 Marsh Road, Suite 110, Menlo Park, CA 94025
Voice: 650.326.2245 Fax: 650.326.5134
E-Mail: lsimons@sulmeyerlaw.com
URL: www.sulmeyerlaw.com
Sent from my BlackBerry Wireless Handheld
To: cdcbaa@yahoogroups.com <cdcbaa@yahoogroups.com>
Sent: Mon Dec 06 21:01:17 2004
Subject: RE: [cdcbaa] 401k rollover to IRA
wrote:
> see In re Mooney, 248 B.R. 391
>
Mooney is wrong. Dudley is a 9th Cir Case one year
later.
George and Carmen Dudley fell into a similar trap.
Both had IRA roll overs from qualified pension plans.
$110,271 was in the IRAs at the filing of the case.
The Dudleys had withdrawn $107,000. The trustee's
take, not a retirement use. The bankruptcy court's
ruling. Not exempt. Ninth Circuit held:
The fact that a debtor has withdrawn or will withdraw
sums from an IRA for non-retirement purposes does not
automatically disqualify the debtor from claiming the
amount remaining in the IRA as exempt under
704.115(a)(3). "If the primary purpose is to provide
income for a debtor in retirement, the assets in the
plan should be exempt under 704.115. Otherwise, even
a de minimis depletion of the plan assets would
destroy the exemption, which would be contrary to the
purpose of the exemption statute to preserve income
for retirees." Jacoway v. Wolfe (In re Jacoway),255
B.R. 234, 240, (9th Cir. BAP 2000) (citing In re
MacIntyre, 74 F.3d 186, 188 (9th Cir. 1996) ("The
purpose of the section 704.115 exemption for the
corpus of private retirement plans is to safeguard a
stream of income for retirees at the expense of
bankruptcy creditors.")).We believe the Bankruptcy
Appellate Panel stated the appropriate inquiry in In
re Jacoway.
There is no indication in this case that the
bankruptcy court took into consideration that the plan
could have two purposes, one to supplement current
income, and the other to provide for retirement.
Particularly in light of the liberal construction
given to exemption statutes, see Spencer v. Lowrey,
235 Cal.App.3d 1636, 1639, 1 Cal.Rptr.2d 795 (1991),
where [an IRA] is designed and used for dual purposes,
the court should consider whether the principal
purpose is for retirement or to provide for current
needs. In re Dudley, 249 F.3d 1170, 1176-7 (9th Cir.
2001).
dennis
__________________________________________________
Do You Yahoo!?
Tired of spam? Yahoo! Mail has the best spam protection around
http://mail.yahoo.com
BR>
$4.98 domain names from Yahoo!. Register anything.
http://us.click.yahoo.com/Q7_YsB/neXJAA ... /cDEolB/TM
BR>
Yahoo! Groups Links
<*> To visit your group on the web, go to:
http://groups.yahoo.com/group/cdcbaa/
<*> To unsubscribe from this group, send an email to:
cdcbaa-unsubscribe@yahoogroups.com
<*> Your use of Yahoo! Groups is subject to:
http://docs.yahoo.com/info/terms/
This e-mail message is for the sole use of the intended recipient(s) and may
contain confidential or legally privileged information. Any unauthorized
review, use, disclosure or distribution is prohibited. If you are not the
intended recipient, please contact the sender by reply e-mail, delete this
message from your computer and destroy all copies of the original message.
The post was migrated from Yahoo.
wrote:
> see In re Mooney, 248 B.R. 391
>
Mooney is wrong. Dudley is a 9th Cir Case one year
later.
George and Carmen Dudley fell into a similar trap.
Both had IRA roll overs from qualified pension plans.
$110,271 was in the IRAs at the filing of the case.
The Dudleys had withdrawn $107,000. The trustee's
take, not a retirement use. The bankruptcy court's
ruling. Not exempt. Ninth Circuit held:
The fact that a debtor has withdrawn or will withdraw
sums from an IRA for non-retirement purposes does not
automatically disqualify the debtor from claiming the
amount remaining in the IRA as exempt under
704.115(a)(3). "If the primary purpose is to provide
income for a debtor in retirement, the assets in the
plan should be exempt under 704.115. Otherwise, even
a de minimis depletion of the plan assets would
destroy the exemption, which would be contrary to the
purpose of the exemption statute to preserve income
for retirees." Jacoway v. Wolfe (In re Jacoway),255
B.R. 234, 240, (9th Cir. BAP 2000) (citing In re
MacIntyre, 74 F.3d 186, 188 (9th Cir. 1996) ("The
purpose of the section 704.115 exemption for the
corpus of private retirement plans is to safeguard a
stream of income for retirees at the expense of
bankruptcy creditors.")).We believe the Bankruptcy
Appellate Panel stated the appropriate inquiry in In
re Jacoway.
There is no indication in this case that the
bankruptcy court took into consideration that the plan
could have two purposes, one to supplement current
income, and the other to provide for retirement.
Particularly in light of the liberal construction
given to exemption statutes, see Spencer v. Lowrey,
235 Cal.App.3d 1636, 1639, 1 Cal.Rptr.2d 795 (1991),
where [an IRA] is designed and used for dual purposes,
the court should consider whether the principal
purpose is for retirement or to provide for current
needs. In re Dudley, 249 F.3d 1170, 1176-7 (9th Cir.
2001).
dennis
__________________________________________________
Do You Yahoo!?
Tired of spam? Yahoo! Mail has the best spam protection around
http://mail.yahoo.com
The post was migrated from Yahoo.
see In re Mooney, 248 B.R. 391
Sent: Monday, December 06, 2004 1:47 PM
To: cdcbaa
Subject: [cdcbaa] 401k rollover to IRA
I am about to file a Chapter 7 for a client who is 47 years old and unemployed with a 401k rollover to an IRA worth about $90,000. This would be a joint filing with her husband who is not making much money being self-employed.
Does anyone know if the IRA is still protected because of the original funds being in a 401k? By the way, there has been no commingling or additions made to the account since the rollover.
Thanks,
Nate Berneman
_____
Do you Yahoo!?
The all-new My Yahoo! - What will yours do?
Yahoo! Groups Sponsor
ADVERTISEMENT
The post was migrated from Yahoo.
I am about to file a Chapter 7 for a client who is 47 years old and unemployed with a 401k rollover to an IRA worth about $90,000. This would be a joint filing with her husband who is not making much money being self-employed.
Does anyone know if the IRA is still protected because of the original funds being in a 401k? By the way, there has been no commingling or additions made to the account since the rollover.
Thanks,
Nate Berneman
Do you Yahoo!?
The all-new My Yahoo! What will yours do?
I am about to file a Chapter 7 for a client who is 47 years old and unemployed with a 401k rollover to an IRA worth about $90,000. This would be a joint filing with her husband who is not making much money being self-employed.
Does anyone know if the IRA is still protected because of the original funds being in a 401k? By the way, there has been no commingling or additions made to the account since the rollover.
Thanks,
Nate Berneman
Do you Yahoo!?
The all-new My Yahoo! What will yours do?
The post was migrated from Yahoo.