Is an educational IRA, specifically a Coverdell ESA Exempt from CH 7??

[bk2011]

Is a coverdell ESA educational IRA exempt from chapter 7? We thought it was and our Trustee is telling us otherwise.

Any comments are appreciated.

Thanks!
J

[debee]

If Coverdells are 530 plans, they're excluded but there are a few qualifications. It depends when you put the money into the account, how much and who the beneficiary is.

It's detailed in 11 USC 541 b(5) which you can read here: http://www.law.cornell.edu/uscode/us...1----000-.html

edit: The beneficiary must have been a child in the taxable year for which the funds were contributed, anything in the 365 days pre-filing is not excluded, and anything over 5K between 1 & 2 years pre-filing is also not protected. Also, the accounts can't exceed IRS limits.