Many people are aware of the tax deferral benefits of 401(k) plans and traditional IRA accounts, but these types of retirement accounts can also provide asset protection benefits. This column discusses how there are certain retirement assets that a person can protect from creditors in the event of a personal bankruptcy or legal liability. There are some real life examples of this playing out involving both O.J. Simpson and Lance Armstrong. “Mr. Simpson still owns a defined benefit plan from the NFL, valued at over $4 million. Despite O.J.’s $33 million liability, under ERISA law the former star’s defined benefit plan is protected from the Goldman and Brown families.” Lance Armstrong has also been involved in many lawsuits after his doping scandal but he has used different estate planning techniques like creating trusts to help shield many of his assets.
See Martin Walsh, How O.J. Simpson and Lance Armstrong Protected Their Millions, Wealth Management, February 8, 2016.
Special thanks to Jim Hillhouse for bringing this article to my attention.
