Supreme Court Rules Against Debtors in Inherited IRA Case


A unanimous Supreme Court in the case of Clark v. Rameker 2014 U.S. Lexis 4166 has ruled that inherited IRA's are not "retirement funds" and therefore are not exempt from creditors' claims in a bankruptcy case.

Debtors who are considering filing for bankruptcy now need to determine the source of their retirement accounts.  Inherited accounts are not exempt unless the person inheriting the IRA is a spouse.  Otherwise, the funds in an inherited IRA may be seized and sold by the bankruptcy trustee.  If you are considering filing for bankruptcy and have assets in a retirement account, it is advisable to speak with an attorney prior to filing.