retirement fund w/o beneficiary in probate protected by erisa?

[ellentk]

Jurisdiction

New York

Is money in an Erisa-qualified retirement fund without a named beneficiary protected from creditors by erisa when transferred into the decedent's estate and then to the party named in the will? The retirement fund has a little over $30,000 which in New York would force it into probate.

 

[army judge]

Your answer is to be found upon your perusal of this informative article that addresses your query.

http://summitalliance.net/wp-conten...ction-Within-Annuities-and-Life-Insurance.pdf

 

[ellentk]

Thanks for your reply. Interesting article. But, erisa isn't mentioned in it.

 

[army judge]

Thanks for your reply. Interesting article. But, erisa isn't mentioned in it.

I respectfully beg to differ:

For example, the Supreme Court has ruled, in Patterson v. Shumate, that retirement plans that are qualified under ERISA (29 U.S.C. section 1001, et seq.) are exempt from the claims of the employee's creditors pursuant to 11 U.S.C. section 541(c)(2) as an enforceable spendthrift trust under "applicable non-bankruptcy law." Furthermore, by association, IRAs established under Internal Revenue Code (IRC) Section 408 (and most likely Roth IRAs established under IRC Section 408A, as well), may be exempt under 11 U.S.C. section 522(d)(10)(E), which exempts "a payment under a stock bonus, pension, profit sharing, annuity, or similar plan or contract on account of illness, disability, death, age, or length of service. . . ." or under state exemption statutes. Seemingly, this reasoning would also extend to commercial annuity products, at least if held for true retirement planning purposes (rather than as they are sometimes marketed-as a tax-favored investment vehicle), but significant issues remain.

 

[ellentk]

I respectfully apologize for not noticing that section.

Thank you very much for your help.