Signing a broker indemnification agreement won’t let creditors grab your IRA. A man rolled over his IRA to a new brokerage account. The agreement that he signed granted the firm a lien on all his assets in its custody to cover any outstanding debt he might have to the broker. He never opened up another account with the broker, and the firm never dipped into his IRA. A few years later, he filed for bankruptcy, and the trustee claimed the IRA’s assets, saying the IRA owner pledged the account.
The indemnity agreement doesn’t destroy the IRA’s bankruptcy exemption, an Appeals Court says. Since the IRA owner never traded any securities on margin, the IRA’s assets were never used as security for a loan from the broker (Daley, 6th Cir.).