Source: http://nybusinesslitigator.com/?p=439
Timestamp: 2019-04-23 00:34:33+00:00

Document:
“(c) Trust exemption. 1. Except as provided in paragraphs four and five of this subdivision, all property while held in trust for a judgment debtor, where the trust has been created by, or the fund so held in trust has proceeded from, a person other than the judgment debtor, is exempt from application to the satisfaction of a money judgment.
4. This subdivision shall not impair any rights an individual has under a qualified domestic relations order as that term is defined in section 414(p) of the United States Internal Revenue Code of 1986, as amended or under any order of support, alimony or maintenance of any court of competent jurisdiction to enforce arrears/past due support whether or not such arrears/past due support have been reduced to a money judgment. (emphasis added). See also, New York Practice, Enforcing Judgments and Collections, § 7:243 “Mandates for trust to be and remain exempt” (Westlaw 2015).
In addition, CPLR § 5205(c)(5) states that additions to an IRA are not exempt if they are made 90 days before the claim.
5. Additions to an asset described in paragraph two of this subdivision shall not be exempt from application to the satisfaction of a money judgment if (i) made after the date that is ninety days before the interposition of the claim on which such judgment was entered, or (ii) deemed to be fraudulent conveyances under article ten of the debtor and creditor law.
New York courts have considered these issues. For example, in Bayerische Hypo-Und Vereinsbankk AG v. DeGiorgio, 74 A.D. 3d 492 (1st Dept. 2010), the Appellate Division held that a rollover IRA was exempt from attachment by an employer; see also, J.K.C. v. T.W.C., 39 Misc. 3d 899 (Sup. Ct. Monroe Co. 2013)(attorney’s charging lien cannot be asserted against IRA). In Breslin Realty Dev. Corp. v. Morgan Stanley, 48 Misc. 3d 424 (Sup. Ct. Nassau Co. 2015), the court held that additional deposits into retirement accounts made after 90 days before commencement of the action on which judgment is entered were subject to turnover.
The courts that have applied the statute to alimony arrears have ruled that alimony falls within an exception and the trust exception does not prevent collection.
An ex-spouse can reach her former spouse’s 401(k) plan to collect a judgment for arrears and support pursuant to CPLR 5205 (c). Mayer v. Mayer, 12 Misc3d 1151(A)(Fam. Ct., Orange Co. 2006).
In Berger-Carniol v. Carniol, 273 A.D.2d 427 (2d Dept. 2000), the court cited CPLR 5205(c)(4) and held that it was not error to direct the payment of support arrears from an IRA. Even counsel fees that are in the nature of support are coverd by CPLR 5202(c )(4) which prevents a husband from claiming an exemption for pension funds. AB v. GH, 31 Misc.3d 945 (Sup. Ct. N.Y. Co. 2011).
In Carr v. Jonbil, Inc., 245 A.D.2d 369 (2d Dept. 1997), the court held that funds in a husband’s profit sharing plan were exempt under CPLR 5205(c ) from satisfying his wife’s judgment because there was no qualified domestic relations order entered. While this case may appear favorable to your position, since it upheld an exemption where there was no QDRO, the case did not appear to involve alimony and therefore is factually distinguishable from our situation.
A former spouse does have a legal basis to try to enforce the judgment for alimony against an IRA and 401(k) in New York. The accounts would fall within this exception in CPLR 5205(c)(4) and would not be exempt under these circumstances.
If you have any legal questions or need help with enforcement of a judgment, please contact Attorney Scott Lanin at (212) 764-7250 x 201 or use the contact form in the right sidebar.

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 § 5205
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