Exclusions from estate property

• S. 256 § 225; educational retirement accounts; state tuition programs

A new paragraph (b)(5) is added to § 541, providing that funds placed in an educational retirement account at least 365 days prior to a bankruptcy filing, within the limits established by the Internal Revenue Code, and for the benefit of a child or grandchild of the debtor, are excluded from the debtor’s estate,
with a $5000 limit on funds contributed between one and two years before the filing. A new paragraph (b)(6) similarly excludes similar contributions to qualified State tuition programs, as defined in the Internal Revenue Code,

• S. 256 § 323; contributions to employee plans

Another new exclusion from estate property, § 541(b)(7), applies to employee contributions to ERISA-qualified retirement plans, deferred compensation plans, tax-deferred annuities, and health insurance plans.