Updated September 4, 2026. Quick answer: New York fully exempts a traditional or Roth IRA from ordinary creditors with no dollar cap by treating it as a spendthrift trust, but a federal court has held that fiction does not extend to an inherited IRA, and New York’s own code carries two conflicting bankruptcy statutes on the opt-out question.
Confidence note: high. This page covers ordinary judgment-creditor protection under New York law and the state’s bankruptcy exemption election; see the 51-jurisdiction summary at IRA creditor protection by state for how it compares.
How New York protects an IRA from ordinary creditors
| Traditional IRA (outside bankruptcy) | Fully exempt, no dollar cap: CPLR §5205(c)(2) and (3) deems an IRA (and Keogh, 401, 457, and rollover accounts) a trust "created by, or…proceeded from, a person other than the judgment debtor," conclusively presumed a spendthrift trust for all purposes, including bankruptcy. |
|---|---|
| Roth IRA | Expressly named, by cross-reference to IRC §408A. |
| Inherited / beneficiary IRA | Excluded by case law: In re Todd, 585 B.R. 297 (Bankr. N.D.N.Y. 2018), held an inherited IRA is not exempt under CPLR §5205(c), reasoning the debtor had actual, exclusive control over the funds, unlike a true third-party-settled trust. |
| Bankruptcy exemption choice | Internally conflicting: N.Y. Debtor and Creditor Law §284 declares a bankruptcy opt-out, but §285, enacted "notwithstanding any inconsistent provision of law," lets an individual debtor elect the federal 11 U.S.C. §522(d) list anyway. How courts currently reconcile the two sections was not independently confirmed by case law this session; on the plain text of §285, an individual debtor’s federal election appears available. |
| Carve-outs and exceptions | Additions to the account made within 90 days before the creditor’s claim was raised, or that qualify as a voidable transaction, lose the exemption; a qualified domestic relations order or a support/alimony/maintenance arrears claim can reach the account. |
Coordinate this with your overall estate and retirement plan
An adviser can help weigh whether to roll an IRA into an employer plan for stronger creditor protection, how much to keep in each account type, and how state law interacts with the rest of your plan, but that does not replace reading your own state’s statute.
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The federal backdrop, the same in every state
Two separate systems can protect an IRA, and which one applies depends on whether you are in bankruptcy. Outside bankruptcy, in an ordinary lawsuit and judgment, only your state’s own exemption statute protects an IRA; there is no federal floor. Inside a Chapter 7 or 13 case, a debtor who lives in a state that allows the choice (see the table below) may instead elect the federal exemption list, which protects retirement funds under 11 U.S.C. §522(d)(12) for accounts exempt from tax under IRC §401, 403, 408, 408A, 414, 457 or 501(a). For traditional and Roth IRAs specifically (not SEP or SIMPLE plans, and not amounts rolled over from an employer plan, which stay unlimited), that federal protection is capped in the aggregate at $1,711,975 (11 U.S.C. §522(n), adjusted for inflation effective April 1, 2025 through March 31, 2028; the base figure was $1,000,000 in 2005 and is reindexed every three years). A state that has NOT opted out of the federal list still leaves the debtor free to use state exemptions instead if the state amount is better, since the debtor picks whichever list helps more, once, for the whole case.
A 401(k) or other ERISA-qualified employer plan does not depend on any of this: its anti-alienation protection is federal, unlimited and the same in every state, in or out of bankruptcy. See 401(k) vs. IRA creditor protection for that comparison in full.
Inherited IRAs are a separate question
In 2014 the U.S. Supreme Court held, unanimously, that an inherited IRA is not a “retirement fund” within the meaning of the federal bankruptcy exemption, in Clark v. Rameker, 573 U.S. 122 (2014). That holding controls only the federal bankruptcy exemption; it says nothing about what a state’s own exemption statute does outside bankruptcy, or about a state that has opted out and writes its own bankruptcy-time exemption list. Some states responded by amending their own statutes to protect inherited IRAs expressly; most have simply never addressed the question. See inherited IRA creditor protection for the full explanation of the ruling and its reasoning.
Statute and sources
Governing citation: N.Y. CPLR §5205(c); N.Y. Debtor and Creditor Law §§284, 285.
Read September 4, 2026.
Related: IRA creditor protection, all 51 jurisdictions · 401(k) vs. IRA creditor protection · inherited IRA creditor protection.
General information drawn from each state’s own published statutes, not legal, tax or financial advice. Exemption amounts and rules are set by state law and can change by future legislation or court decisions; whether a specific IRA is protected in a specific case depends on facts this page cannot see. We are not a law firm, a tax adviser, or a fiduciary, and this is not personalized advice. Talk to a bankruptcy or asset-protection attorney licensed in your state before relying on any figure here.
New York protects home equity from an ordinary money judgment too, under a separate statute and a separate set of dollar limits: see the New York homestead exemption.