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Thanks to our legislature and our professional organization, the Financial Planning Association of North Central Alabama, investors of Alabama may now more clearly understand how their IRAs are protected from court settlements and creditors.

About three years ago, as president of our local chapter, it was brought to my attention that the language that defines IRA protections in our state was so hard to read, that in order to feel confident in understanding the code, a law degree was almost necessary.

With such confusing language, investors didn’t have the opportunity to understand the protections offered under an IRA and how these protections compared to those offered under their 401(k) plan; important knowledge with considering a rollover. This would have left our clients in the position of either keeping their assets in their 401(k)s, where options and service can be limited, hiring a lawyer to define the protections, or simply hoping that they were protected. None of those were good enough for us.

Now, the language is clear. Regarding creditor claims and judgments, IRA protections have parity with 401(k) protections, and the layperson may see for herself.

Such a task would seem to be straightforward. Even so, introducing legislation is a process, and this one took three years and required much effort by several parties. Ross Cohen and Allen Blow, attorneys of Baker Donelson were involved. Fellow FPA Members Stewart Welch, Fergus Tuohy, Kyle Whittington, Beth Moody, David Ward, and Joe Stephens made trips to Montgomery and helped us lobby. Since we all have day jobs and were complete novices, we could not have navigated the legislative process without the help of Amanda Senn, General Counsel of the Alabama Securities Commission. And finally, the legislators: Jabbo Waggoner and Slade Blackwell pushed this through the Senate. In the house, Ken Johnson and Chris Blackshear co-sponsored the bill with David Faulkner, who deserves special thanks for patiently taking the many calls from this rookie part-time lobbyist, and for his extra effort in working through the involved legislative process.

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