Using unfiled dischargeable tax liens to attach to ERISA-qualified pension plan interests after Patterson v. Shumate

Article Abstract:

The 1992 US Supreme Court decision in Patterson v. Shumate protects pension plans from being claimed by creditors in bankruptcy proceedings, but it may impose tax liens that would not be imposed if plans remained in debtors' estates. The conflict goes against the spirit of the decision and ERISA. Amendments to the Bankruptcy Code could correct the situation. The Supreme Court named Bankruptcy Code section 541(c)(2) as a source of law for excluding pension plans.

Priorities of claims and liens, Tax liens

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Divorce court order dividing retirement plan assets is not dischargeable in bankruptcy

Article Abstract:

The US 9th Circuit Court of Appeals in In re Lowenschauss held that the portion of a retirement plan ordered to be distributed to the former wife by a state divorce court was not part of the bankruptcy estate of the former husband and could not be discharged in bankruptcy. The plan was not ERISA qualified, but the state court's order gave the former wife an immediate property right.

Extinguishment of debts, Debt cancellation, Conflict of laws, Equitable distribution of marital property, Divorce property distribution

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Bankrupt debtor's interest in s. 403(b) annuity contract is excluded from bankruptcy estate

Article Abstract:

The IRS in Field Service Advice 1999-632 stated that an annuity which was part of a governmental defined contribution plan under IRC section 403(b) was not part of the bankruptcy estate of the debtor public school employee. The non-ERISA annuity was excludable in accordance with Bankruptcy Code section 541(c)(2) due to its spendthrift provisions.

Cases, Contracts, Defined contribution plans, Annuities

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