Is Your IRA Safe in a Personal Injury Lawsuit
Is Your IRA Safe in a Personal Injury Lawsuit?
If someone sues you for causing a personal injury, you understandably worry about how to protect your personal assets. Retirement accounts in particular raise concerns; you do not want to lose your nest egg to a personal injury lawsuit. If you have an individual retirement account (IRA), protecting its value takes priority.
Fortunately, Wisconsin residents have protections built in at the federal and state levels.
Protection Under Federal Bankruptcy
A key protection you can maintain against financial ruin in a lawsuit comes through your liability insurance. Homeowner’s coverage, auto liability coverage, and other forms of insurance often cover the cost when your negligence results in a serious injury. But you may not have enough coverage, or an injury may fall under a policy exclusion that leaves you unprotected.
If a lawsuit forces you to declare bankruptcy, federal law protects your IRA from recovery. This protection applies to the first $1,283,025 in IRA value, so you have a large measure of protection for those assets.
Protection Under Wisconsin Law
Declaring bankruptcy often creates problems for you. Fortunately, Wisconsin residents have an additional legal protection. Wisconsin statute 815.18(3)(ds) exempts IRAs from collection by creditors, including judgment creditors. You can thus protect your retirement savings in most cases even if you receive a large judgment against you.
The Right Legal Representation
Of course, the best protection for your assets comes from getting great representation. When you are sued, you need to work with an attorney who takes the time to understand your legal and financial picture. Sometimes the realities of your case or the financial risks of trial make settling before trial a wise decision. Other times, defending against the suit will be the right decision for you.
Eisenberg Law Offices starts by meeting with you and understanding your unique situation, and then works with you to determine the right strategy for you. Your strategy should start with your needs and protecting the assets on which you and your family rely. Contact us today for your free consultation.