Supreme Court Rules Inherited IRAs are Not Protected From Creditors

[wanaberetiree]

https://www.forbes.com/forbes/welco...in-bankruptcy/&refURL=&referrer=#6b278c1023d9

I was surprised to learn this, sharing FYI

 

[cooch96]

I suppose I would've been surprised if it had. The intent is to incentivize saving by providing a tax haven, not a way to enable reneging private debts.

 

[Fedup]

I believe in California IRA account, non-ERISA type, has not been shielded by creditors.

 

[CardsFan]

Seems like a rational decision to me. Interesting to note the comments about rolling a spousal IRA into your own. Then it IS protected.

 

[MichaelB]

From NOLO, states can provide additional protection, and some already do. Supreme Court Rules Inherited IRAs are Not Protected From Creditors | Nolo.com

Seven states already have bankruptcy exemptions that exempt all inherited IRAs from creditor’s bankruptcy claims: Arizona, Alaska, North Carolina, Missouri, Florida, Texas, and Ohio.

 

[wanaberetiree]

Wonder if any one set up a conduit trust to protect from this ....

 

[pb4uski]

So when the account is liquidated to pay creditors, Uncle Sam and her state get their shares first I presume.

 

[Sunset]

I'm glad that wasteful lady (ok did not research in how she racked up debt). will pay it from the assets she had on hand. No reason the rest of society should pay it for her.