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NO. 12. AN ACT RELATING TO PROTECTION OF SELF-DIRECTED RETIREMENT ACCOUNTS.

(H.16)

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1. 12 V.S.A. § 2740 is amended to read:

§ 2740. GOODS AND CHATTELS; EXEMPTIONS FROM

ATTACHMENT AND EXECUTION

The goods or chattels of a debtor may be taken and sold on execution, except the following articles, which shall be exempt from attachment and execution, unless turned out to the officer to be taken on the attachment or execution, by the debtor:

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(16) the debtor's interest*[, not to exceed $10,000.00 in aggregate value,]* in self-directed retirement accounts of the debtor, including all pensions, all proceeds of and payments under annuity policies or plans, all individual retirement accounts, all Keogh plans, all simplified employee pension plans, and all other plans qualified under Sections 401, 403, 408, 408A or 457 of the Internal Revenue Code. However, an individual retirement account, Keogh plan, simplified employee pension plan, or other qualified plan, except a Roth IRA, is only exempt to the extent that contributions thereto were deductible from federal income taxation at the time of contribution, plus interest, dividends or other earnings that have accrued on those contributions, plus any growth in value of the assets held in the plan or account and acquired with those contributions. A Roth IRA is exempt to the extent that contributions thereto did not exceed the contribution limits set forth in Section 408A of the Internal Revenue Code, plus interest, dividends or other earnings on the Roth IRA from such contributions, plus any growth in value of the assets held in the Roth IRA acquired with those contributions. No contribution to a self-directed plan or account shall be exempt if made less than one calendar year from the date of filing for bankruptcy, whether voluntarily or involuntarily. Exemptions under this subdivision shall not exceed $5,000.00 for the purpose of attachment of assets by the office of child support pursuant to 15 V.S.A. § 799;

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Approved: May 13, 1999