Law Office of
Robert J. Mintz
Exclusive Legal Representation For Your
Asset Protection Planning Needs
  • Asset Protection
  • Estate Planning
  • International Tax
  • Business Planning

Inherited IRA’s Not Protected From Creditors

by rjmintz on June 23, 2014

The U.S. Supreme Court ruled this month that inherited IRA’s are not exempt from creditors in bankruptcy.

Mr. and Mrs. Clark were the owners of a small pizza shop in Soughton, Wisconsin.  In 2010 they filed for bankruptcy and closed the store.  Their only remaining asset was an IRA inherited from Mrs. Clark’s mother with a value of about $300,000.  Although regular IRA’s are generally protected from creditors, the Court unanimously determined that inherited IRA’s don’t serve a similar retirement purpose and should not be accorded protected treatment in bankruptcy.

The treatment of inherited IRA’s is now a significant estate planning issue for many individuals.  Those who hold IRA’s that may be left to children, should arrange for the IRA to be held in a manner which protects the asset from future or even outstanding claims against the children.  Creating and designating a properly designed spendthrift trust as the IRA beneficiary can often accomplish a significant level of protection for family members.

See full Reuters article

Leave a Comment

Previous post:

Next post:

Complimentary New Book

New & Revised Edition
Asset Protection for Physicians and High-Risk Business Owners by Robert J. Mintz JD, LLM

Essential reading for every professional, business owner and potential deep-pocket lawsuit defendant.

Legal Services Request

Free Consultation:

Or call 760-758-4748 to schedule a phone consultation