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Inherited IRAs Passing to a Nonspouse Beneficiary are not Entitled to an Exemption Under Federal Bankruptcy Law

Thursday, November 13, 2014
Category: Tax & Pension Law, Wills, Trusts and Estate Litigation

The recent decision of the U.S. Supreme Court in Clark v. Rameker, 134 S Ct. 2242 (2014) resolves a dispute in the lower courts about the status of inherited IRAs under federal bankruptcy law.

In this decision, an unanimous Supreme Court ruled that certain inherited IRAs (those passing to a non-spouse beneficiary after the owner has died) are not entitled to an exemption for retirement accounts under federal bankruptcy law.

Reference: Robert H. Louis, Esquire, Probate and Trust Law Section Newsletter, Philadelphia Bar Association (September 2014, No. 137, Page 17)

Filed Under: Estate Law; Inherited IRA; Bankruptcy Exemption

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