In re Clark and Inherited IRAs

Posted on June 24, 2014. Filed under: Uncategorized |

Excellent post regarding an important recent United States Supreme Court case regarding bankruptcy and inherited IRA’s by my fellow Hawaii bankruptcy attorney Stuart Ing. Thank you Stuart, for this post !

Bankruptcyblog.org

In a recent US Supreme Court decision, the Justices took a look at the issue of is an inherited IRA exempt under Federal exemptions (522(b)(3)(C).

In bankruptcy, pretty much all retirement plans recognized by the IRS are protected from being used by the Trustee to pay a Debtor’s creditors. So if you had $200k in your 401k, the Bankruptcy Court couldn’t force you to use those funds to pay creditors. Congress felt that retirement savings were more important that paying creditors.

In the In re Clark case, Ruth Heffron, who was the original IRA owner, died and her IRA was inherited by her daughter. The daughter ended up filing bankruptcy and the Trustee wanted to use the money in the inherited IRA to pay creditors. The Supreme Court ended up siding with the trustee.

But not all is lost. While the inherited IRAs may not be exempt under Federal…

View original post 50 more words

Make a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Liked it here?
Why not try sites on the blogroll...

%d bloggers like this: