The Counselor Blog
Clark v. Rameker – Supreme Court Rules that Inherited IRAs are Not Protected from Creditors
Last week the United States Supreme Court issued the long awaited decision in the case of Clark v. Rameker. The decision resolved a conflict among the lower courts as to whether or not an inherited retirement account was exempt from creditor claims in Bankruptcy. Generally, your own retirement account (Traditional IRA, Roth IRA, 401K, 403B and the like) is exempt from the claims of creditors, meaning it cannot be seized by judgment creditors or lost in a bankruptcy. However, it has been unclear whether this same protection is available to retirement accounts you inherit from another.
Planning for Retirement Accounts – More Senate Action on the Stretch IRA
Last year in this Blog I wrote about the efforts of Sen. Max Baucus (D-Mont.) to limit the ability of non-spouse beneficiaries of IRAs to stretch out withdrawals over their lifetime. Presently a non-spouse beneficiary can enjoy years, if not decades, of tax deferred or tax free growth on inherited IRAs (traditional or Roth). Last week, the Senate took up this cause again in relation to its efforts to fund the extension of low interest rates on student loans.
Blended Families and Estate Planning
Most parents want to ensure that at least some of their assets will pass to their children. However, with blended families absent good estate planning, there is no guarantee that their children will inherit their assets.
Bill Seeks to Eliminate Stretch IRA
Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee has added a provision to The Highway Investment, Job Creation and Economic Growth Act of 2012 that will reduce the value of inherited IRAs.