There may not be much reliable light out there.
Susan T Bart, Esq has addressed creditor protection topics for 529s in NY and Fl and I think she is IL based. She writes for Morning Star. She appears well versed on legal matters .
(Some of the other stuff I saw was purely simplistic and unreliable)
1.Last time I looked at a state law it appeared to address that holder/owner was protected and it did not address or limit it to resident per se--but I did not read either law you cite nor would my views count as reliable.
2. Content seems to vary quite a bit.
3. If IL law applies to IL residents it may apply to all such plans held--certainly if public policy in IL is to rule out 529s it is likley to apply no matter where held. Then again it depends on who IL law reads.
4. Practical matter is state may have a big marketing incentive to protect its own instate participants but one must wonder how hard it would really fight to protect a nonresident participant?
5. I believe I could quickly move a WV praoduct to IL so as to gain IL protection--and do so w/o running afould of fraudulent conversion laws.
6. In my state I believe I could quicky shed ownership to some unrelated owner and completely obfuscate the picture--and not necessary trip over the fraudulent conveyance law of my state.
7.The level of protection in your state is NOT obvious.
8.In some states, without a protection statute, I believe a creditor could end run a plans protection, a creditor may not be able to pierce the plan but the owner can--merely get a court order upon the owner to go get teh planand cash it out and deliver it as court directs--and go to cooler for contempt if you fail to do so. A variation of this concept exists in some states for Medicaid --the state feels you could go get it!( NY) Other states say is out of loop.(MI)
AND asset protection may depend upon who the creditor is---it may not be out of the pot for equitable distribution issues in a contested divorce!
And it you get forced into bankrupcy there is essnetially a 3 tier test as to what is v what out--older gifts are out--some midterm gifts or are out but capped and new transfers are in....if you own it of course.
OK, now I'll add one more intentiallevel of obfuscation, what kind of 529? A 529/UTMA? The uniform transfer act has some very clear language that this is a completed transfer to the child--and is likley in your stateversion--I know it is in PA version--and rather recently our PA Supreme Court held that a UTMA is irrevocably vested with the child--so in that light it would seem very hard to get anyone to unwrap such a 529/UTMA even if you gift was barely cold. (You might get hit with fraudulent transfer issues but thats not your question. )
Of course you could use a trust as owner--and even domocile the trust in some hard to penetrate state for trusts like DE.
If you have big $$ exposure You'd be wise to use IL counsel ?
_________________________
Drew
| 
