Solo 401k Creditor Protection in Arizona

QUESTION: 

I'm not to sure about my current financial situation so need to plan for the worst. Is a solo 401k plan protected from creditors as well as in in bankruptcy?

ANSWER: 

Good question.  Whether a solo 401k plan is protected from creditors, depends on your state of residence.

A solo 401k is 100% protected from creditors in the state of Arizona.

A solo 401k is also afforded bankruptcy protection which applies to all 50 states so yes.

Words of Caution

While a solo 401k is afforded both creditor and bankruptcy protection in Arizona, this may not be the case if the solo 401k plan gets tangled up in a prohibited transaction. Reason being,  generally once a solo 401k plan is found to have engaged in a prohibited transaction, it is generally considered fully taxable from January 1 of the year of the first prohibited transaction.

To find out more about the solo 401k regulations, VISIT HERE.