Estate Planning Red Flag – You believe all inherited IRAs are protected from creditors in bankruptcy

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Abstract: Until recently, it was widely believed that inherited IRAs, like other IRAs, are protected from creditors in bankruptcy. But in a June 2014 decision — Clark v. Rameker — the U.S. Supreme Court held that an IRA inherited by the owner’s daughter was not. This article provides details of the Court’s findings and explains why leaving an IRA to a trust rather than a family member may be beneficial if bankruptcy is a concern. Clark v. Rameker, No. 13-299, June 12, 2014 (Supreme Court)