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Private Retirement Plans [1 Attachment]
Dennis, et al:
The source of the exemption for IRAs is 522(b)(3)(C), not 522(n). The
analysis is: 522(b)(1) allows an individual to use either 522(b)(2) or
522(b)(3). CA has opted out of 522(b)(2), so we use 522(b)(3) which has
subparts:
(1) 522(b)(3)(A) which allows exemptions under Fed law (scattered
throughout the US Code, e.g 38 U.S.C. 5301(a): Veterans Benefits; 45 U.S.C.
231m(a): Railroad Retirement) except 522(d), and our state or local law (CA
CCP 703 and 704 exemptions) ;
(2) 522(b)(3)(B) which applies to tenancy by the entireties, which we
dont have in CA: and
(3) 522(b)(3)(C) which is one of the few gifts for debtors in BAPCPA,
which exempts the laundry list of tax exempt retirement funds. Some of
these were already outside the estate under 541(c)(2), but the real change
was the addition of IRAs (IRC 408) and Roth IRAs (IRC 408A),
522(n) only contains the limits on IRAs and Roth IRAs that are exempted in
(b)(3)(C). Thus the other IRC sections listed in (b)(3)(C), 401, 403, 414,
457, 501(a) do not have the limit.
If you have any questions or concerns, please contact me.
Pat
Patrick T. Green, Esq.
Fitzgerald & Green
Attorneys at Law
1010 E. Union Street
Suite 206
Pasadena, CA 91106
Tel: 626-449-8433
Fax: 626-449-0565
pat@fitzgreenlaw.com
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Dennis:
Thanks for the substantive contribution which benefits all.
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.
Dennis McGoldrick
Sent: Thursday, March 10, 2011 3:20 PM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] Private Retirement Plans [1 Attachment]
[Attachment(s) from Dennis McGoldrick included below]
Hello:
A little research and I confirmed I was wrong yesterday. There is a thing
called a Private Retirement Plan. If set up properly, they are exempt.
CCP704.115
I found an article on them in a State Bar Publication. It is attached.
the author is:
Law Office of Dennis A. Fordham
55 First Street - 2nd Floor
Lakeport, California 95453 USA
Tel: (707) 263-3235
Fax: (707) 263-4169
Dennis@DennisFordhamLaw.com
Please note, his comments in the article about the $1.0 million IRA
exemption in bankruptcy are incorrect. 522(b) is where Californians have to
chose between fed and state exempts. 522(n) has the IRA exemption and is
therefore not limited by 522(b). I already wrote and told him about the
error.
Also note, his analysis in the article is the same analysis we used to have
to go trough to prove an IRA was exempt (before Bacpaa). The designed and
used cases are generally strictly enforced.
It appears there is no actual form for a private pension plan, but one must
be in writing to claim a private pension is designed to be a pension plan.
The author of the article, also a Dennis, says use another type of pension
plan and strip out the statutory references to the irs and erisa. .......
It would be nice if there was an approved form.
Have fun reading,,
dennis
text of 704.115 follows:
704.115. (a) As used in this section, "private retirement plan"
means:
(1) Private retirement plans, including, but not limited to, union
retirement plans.
(2) Profit-sharing plans designed and used for retirement
purposes.
(3) Self-employed retirement plans and individual retirement
annuities or accounts provided for in the Internal Revenue Code of
1986, as amended, including individual retirement accounts qualified
under Section 408 or 408A of that code, to the extent the amounts
held in
the plans, annuities, or accounts do not exceed the maximum
amounts exempt from federal income taxation under that code.
(b) All amounts held, controlled, or in process of distribution by
a private retirement plan, for the payment of benefits as an
annuity, pension, retirement allowance, disability payment, or death
benefit from a private retirement plan are exempt.
(c) Notwithstanding subdivision (b), where an amount described in
subdivision (b) becomes payable to a person and is sought to be
applied to the satisfaction of a judgment for child, family, or
spousal support against that person:
(1) Except as provided in paragraph (2), the amount is exempt only
to the extent that the court determines under subdivision (c) of
Section 703.070.
(2) If the amount sought to be applied to the satisfaction of the
judgment is payable periodically, the amount payable is subject to an
earnings assignment order
for support as defined in Section 706.011
or any other applicable enforcement procedure, but the amount to be
withheld pursuant to the assignment order or other procedure shall
not exceed the amount permitted to be withheld on an earnings
withholding order for support under Section 706.052.
(d) After payment, the amounts described in subdivision (b) and
all contributions and interest thereon returned to any member of a
private retirement plan are exempt.
(e) Notwithstanding subdivisions (b) and (d), except as provided
in subdivision (f), the amounts described in paragraph (3) of
subdivision (a) are exempt only to the extent necessary to provide
for the support of the judgment debtor when the judgment debtor
retires and for the support of the spouse and dependents of the
judgment debtor, taking into account all resources that are likely to
be available for the support of
the judgment debtor when the
judgment debtor retires. In determining the amount to be exempt under
this subdivision, the court shall allow the judgment debtor such
additional amount as is necessary to pay any federal and state income
taxes payable as a result of the applying of an amount described in
paragraph (3) of subdivision (a) to the satisfaction of the money
judgment.
(f) Where the amounts described in paragraph (3) of subdivision
(a) are payable periodically, the amount of the periodic payment that
may be applied to the satisfaction of a money judgment is the amount
that may be withheld from a like amount of earnings under Chapter 5
(commencing with Section 706.010) (Wage Garnishment Law). To the
extent a lump-sum distribution from an individual retirement account
is treated differently from a periodic distribution under this
subdivision, any lump-sum distribution from an account qualified
under
Section 408A of the Internal Revenue Code shall be treated the
same as a lump-sum distribution from an account qualified under
Section 408 of the Internal Revenue Code for purposes of determining
whether any of that payment may be applied to the satisfaction of a
money judgment.
Message
Dennis:
Thanks for the substantive
contribution which benefits all.
David A.
Tilem
Certified Bankruptcy
Specialist*
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