• Menu
  • Skip to right header navigation
  • Skip to main content
  • Skip to secondary navigation
  • Skip to primary sidebar
  • Skip to footer

Before Header

You Don't Have to Go it Alone! Call for help today! (772) 419-0057

  • Facebook
  • LinkedIn
  • Twitter
  • YouTube

Jon L. Martin – Attorney at Law

Services in Port St. Lucie, FL and Beyond

  • HOME
  • ABOUT
    • Attorney Profile
    • Client Feedback
  • PRACTICE AREAS
    • Bankruptcy
      • Chapter 7
      • Chapter 11
      • Chapter 13
      • Questions & Answers
    • Probate
      • Probate Administration
      • Probate Litigation
      • Probate Benefits
      • Q&A
    • Construction Law
    • IRS Problems
  • FREE EVALUATION
  • FREE E-BOOK
  • BLOG
  • CONTACT
  • Search
  • HOME
  • ABOUT
    • Attorney Profile
    • Client Feedback
  • PRACTICE AREAS
    • Bankruptcy
      • Chapter 7
      • Chapter 11
      • Chapter 13
      • Questions & Answers
    • Probate
      • Probate Administration
      • Probate Litigation
      • Probate Benefits
      • Q&A
    • Construction Law
    • IRS Problems
  • FREE EVALUATION
  • FREE E-BOOK
  • BLOG
  • CONTACT
  • Search

Mobile Menu

Schedule A Free Consultation Now!

Find out how our law firm can help you.

(772) 419-0057

  • Facebook
  • LinkedIn
  • Twitter
  • YouTube

Retirement Funds “Safe” in Bankruptcy? Not so fast!

You are here: Home / Guidance / Retirement Funds “Safe” in Bankruptcy? Not so fast!

February 4, 2019 //  by Jon L. Martin

Everyone “knows” 401K funds, IRA’s and other Retirement funds are exempt in bankruptcy, “. . . to the extent that those funds are in a fund or account that is exempt from taxation under section 401,403,408,414,457 or 501(a) of the Internal Revenue Code of 1986. 11 U.S.C. §522(d)(12)(2018)” … until now!Jon L Martin Law Retirement Funds

Recently, the Bankruptcy Appellate Panel for the Eighth Circuit ruled that merely having a divorce decree that awards half of an ex-spouse’s retirement funds to the parting spouse did not qualify as exempt under 11 U.S.C. USC § 522 (b)(3)(C), absent a properly drafted and executed QDRO. *1

The Eighth Circuit decision relied on an earlier U. S. Supreme Court decision *2 stating that inherited I.R.A.’s do not meet the criteria under 11 USC 522 (b)(3)(C) and are therefore non-exempt.

While the decision is currently an Eighth Circuit decision, it’s a sure bet the same result will soon come to The Southern District of Florida. A word to the wise suggests that Divorce Attorneys should get familiar with this situation and make sure adequate QDROS accompany all divorce settlements going forward.

The “CLARK” decision was based upon the lack of definition in the Bankruptcy Code of the term “retirement funds” wherein the Court resorted to “ordinary meaning” in the following manner;

“. . . fund[s] is sum[s] of money . . . set aside for a specific purpose.”

And;

“. . . retirement means. . . “[w]ithdrawal from one’s occupation, business, or office.”

The “LERBAKKEN” Court said that both conditions must be met and neither occurred, since absent the QDRO the Debtor had unlimited and unrestricted access to the funds thereby rendering them available to the bankruptcy estate. An interpretation that might find its own way to yet another Supreme Court decision. In the meantime, better hone up on QDROS!

*1 United States Bankruptcy Appellate Case No. 18-6018 October 16, 2018 (InRe. Brian A. Lerbakken v Sieloff and Associates,P.A. (Appeal from United States Bankruptcy Court For the District of Minnesota – Duluth)

*2 [(Clark v. Rameker) 134 S. CT 2242 (2014)].

Category: Guidance

Looking for immediate answers to your questions?

Schedule a FREE consultation with Jon L. Martin today!

Jon L. Martin Law is a bankruptcy, probate, and construction arbitration firm on the Treasure Coast of Florida. With over 40 years of combined legal and business experience, they have helped hundreds of people to relieve their financial problems. With offices in Port St. Lucie and Palm City, Jon L. Martin has represented individuals and entities in the cities of Hobe Sound, Jensen Beach, Palm City, Port Salerno, Port St. Lucie, Stuart, Vero Beach, Stuart, Sewall’s Point, Hutchinson Island, and Sebastian.

For more information on bankruptcy and debt settlement issues, please contact Jon L. Martin Bankruptcy Attorney at (772) 419-0057.

Jon is the author of “What Everyone ought to Know about Debt Relief Today!”

Previous Post: « Chapter 12?
Next Post: Will the Supreme Court Overrule “Dewsnup?” »

Reader Interactions

Primary Sidebar

Contact Jon L. Martin

Email (REQUIRED)

Description (optional)

Footer

Law Offices

Jon L. Martin
(772) 419-0057

901 SW Martin Downs Blvd, #309
Palm City, FL 34990

1860 SW Fountainview Blvd. Ste 100
Port St. Lucie, FL 34986

Contact Us

Contact our law offices today. We are ready to help you. There is no better time than now.
Contact →

  • Facebook
  • LinkedIn
  • Twitter
  • YouTube
  • Home
  • Attorney Profile
  • Free Evaluation
  • Free E-Book
  • Blog
  • Contact

Site Footer

Copyright © 2021 Jon L. Martin - Attorney at Law · All Rights Reserved