IRAs, Roth IRAs, SIMPLE IRAs, and simplified employee pensions (SEPs) are not creditor-protected by federal law. Nevertheless, these retirement funds enjoy some protection from creditors through barriers established by state law.
Merely saying that an IRA or SEP is “covered by state law” may not be enough, though. If you move from one state to another and are named in a lawsuit in your former state of residence, which state’s statutes cover the IRA?
The result may vary from state to state and from judge to judge. Each outcome would be case-specific, depending on the situation. Generally, the applicable law will be that of the state of residence of the individual holding the IRA.
That is, if you retire and move to Florida, taking your IRA with you, your IRA may be protected by Florida’s laws. To avoid a challenge in your former state, make sure you cut all ties such as bank accounts, driver’s license, etc.