by John D. Darer CLU ChFC CSSC RSP
Good news regarding Florida’s legislative efforts to statutorily protect inherited IRAs from the claims of creditors of a debtor beneficiary under Florida state law! House Bill 469 unanimously passed both the Florida Senate and House and was sent to the Governor for signature.
HB 469 amends Section 222.21 by inserting the following underlined language:
any interest in any fund or account that is exempt from claims of creditors of the owner, beneficiary or participant . . . does not cease to be exempt after the owner’s death by reason of a direct transfer or eligible rollover . . . including, but not limited to, a direct transfer or eligible rollover to an inherited individual retirement account as defined in s. 408(d)(3) of the Internal Revenue Code of 1986, as amended
HB 469 also adds Section 222.21(c), which provides that “this paragraph is intended to clarify existing law, is remedial in nature, and shall have retroactive application to all inherited individual retirement accounts without regard to the date an account was created.”
The governing law of the designated beneficiary’s domicile will control whether the assets of an inherited IRA are protected from the claims of the designated beneficiary’s creditors, not the governing law of the domicile of the retirement plan owner.
From the standpint of our readers, the benefit of the new bill may intersect with sthe lives of those who have survivor claims in airplane or automobile crashes, medical malpractice, wrongful death and other law suits. Settlement Planners advising Florida beneficiarie should become aware of how the inherited IRA is a resource.