Are 401(k) accounts exempt or considered part of bky
Posted: Thu Dec 17, 2009 11:18 am
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Jeff:
Is the doctor married? I know a few gold diggers, sorry, ladies who might
want his phone number.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
jbsesq1965
Sent: Thursday, December 17, 2009 10:03 AM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] Re: Are 401(k) accounts exempt or considered part of bky
estate?
Jake:
Take a look at section 522(b)(3)(C) and 522(n). Its pretty clear that
401(k)s (and a whole bunch of other tax exempt retirement accounts) are
exempt up to $1,090,000. These exemptions are available to debtors even in
an opt-out state like Calif.
Here is the better question for a client I have, who has a stunning
retirement portfolio (a physician), virtually no other assets, and is
staring down the barrel of a malpractice case that will likely exceed his
med-mal coverage. If a chunk of those accounts are in ERISA qualified
accounts they are not even part of the estate, right? Thus those accounts
don't need section 522 exemption protections, right? So if my doctor has
about $1.5 million in a retirement account that is ERISA qualified through
his employer (a pension), and another $800K in non-ERISA accounts, but that
ARE clearly exempt under section 522, he can pull the trigger on the Chapter
7, and keep all the retirement $$, if he gets whacked in the malpractice
action, right?
I just have a hard time issuing an opinion to my client who has $2.3 million
in the bank that he can file a Chapter 7 and keep it, but I think that this
is exactly the law. Still, why do I feel like I need to call my own carrier
before I put that in writing?
Thoughts?
-Jeffrey B. Smith**
CURD, GALINDO & SMITH, L.L.P.
301 East Ocean Blvd. #1700
Long Beach, CA 90802
(562) 624-1177
(562) 624-1178 fax
(310) 993-6560 cellular
www.expertbk.com
**Certified By The State Bar
Of California As A Specialist
In Bankruptcy Law
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Message
Jeff:
Is the doctor
married? I know a few gold diggers, sorry, ladies who might want his phone
number.
David A.
Tilem
Certified Bankruptcy
Specialist*
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