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Consumer Law

11th Circuit: Fla. Man Can’t Shield IRA In Bankruptcy

An Individual Retirement Account can be an asset protection vehicle. But the Eleventh Circuit decision in Yerian v Webber confirmed a judgment that Keith Yerian’s self-directed IRA could go to his creditors.

Keith Yerian’s behavior was on the egregious side. He titled IRA-owned cars in his own name and his wife’s name, as well as purchased a condo in Puerto Rico with IRA funds and then using the condo for his personal travel needs. Yerian concedes that he incurred over $100,000 in tax penalties for abusing his IRA.

Yerian claimed that the assets inside the self-directed IRA were exempt.  The basis for the trustee’s challenge was that the assets were not managed in accordance with the IRA’s governing document, which required that there not be “prohibited transactions”.

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