NEW YORK, Nov. 11, 2014 (GLOBE NEWSWIRE) -- In June, the Supreme Court in Clark v. Rameker, No. 13-299 (U.S. 6/12/14) said that just because funds are held in an account called an individual retirement account (IRA), it doesn't necessarily mean that they are retirement funds. And if they are not retirement funds, they are not excluded from a bankruptcy estate under Section 522(b)(3) of the Bankruptcy Code.
Moses & Singer LLP Trusts and Estates partner Daniel S. Rubin considers the implications of this decision in his article, "Asset Protection of Retirement Funds after Clark." Published in the Journal of Accountancy (Vol. 218, Issue 4, October 2014), the article examines the implications of the Supreme Court's Clark decision as well as the treatment of IRAs outside of bankruptcy under state laws.
Since an inherited IRA is generally not exempt from creditors either in bankruptcy or outside bankruptcy under the law of most states, Rubin suggests that a concerned IRA owner should consider the advantages of designating a trust as the beneficiary in order to obtain asset protection from creditors for inherited IRAs.
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