Questions and Answers

Can we exercise our right of setoff against an IRA account?

We don’t believe you can exercise your right of setoff against an individual retirement account (IRA), for at least three reasons.  First, it would breach your fiduciary obligations as trustee or custodian of the IRA.  Second, IRAs have been deemed “special deposits” immune from setoff.  And third, the Federal Tax Code provides that IRAs are not “forfeitable”.

(Posted: 02/25/2008)