COVID-19 Update: Sowards Law Firm is open and ready to serve clients during regular business hours. At this time, we are doing remote trust signings via Zoom/GoToMeeting, mobile notaries, and drive-up notaries. Please call us at (408) 371-6000 or use our online form to set up a teleconference. Watch this video to learn more.

Private Retirement Plans

Private Retirement Plans have become one of the most powerful protection and wealth preservation strategies in California in the last decade, because it can be structured as one of the strongest, safest and most cost-effective planning tools for anyone in California who is building private equity, business interests, real estate, or any other investment for their future retirement.
What is it?

Private Retirement Plans or PRPs are programs that are held under California state creditor law in which all funds, distributions and death benefits are “exempt” from lien and seizure both in bankruptcy and non-bankruptcy (creditor lawsuit) situations.

Values & Benefits:
  • Safer: funded with exemption rights, not transferring or gifting assets.
  • Stronger: all assets, earnings, gains and future values are protected during accumulation and even after disbursement for lifetime benefits or death benefits for heirs.
  • Little Cost, if any: if done correctly, PRPs can capitalize on a multitude of tax benefits and can become a profit-center instead of cost by harvesting savings throughout the life of the program:
    • Tax Deductions
    • Tax Deferrals
    • Tax Credits
Management Requirements:

There are key components that get tested under case law, and create planning success when present:

  • Must be established primarily for retirement, not for creditor evasion.
  • Must have a Plan.  The Plan must have an actuarial basis for funding.
  • Must have a Trust for each Participant, which must specify its tax intent.
  • Must have an independent Trustee.
  • Must have an independent Plan Administrator.
How do you find out more?

We have partnered with in industry leader in PRP administration TRUST-CFO®, who has developed all the required analysis including upfront funding, annual benchmarking, and future plan distribution testing, to maximize the Plan strength when/if tested.

Please use these key tools to help you evaluate your current circumstance and find out what “Creditor & Tax’ exemption protection rights you have, which ones you may be forfeiting, and which ones you can claim to protect against asset seizure, erosion, and loss.