Bankruptcy and Individual Retirement Accounts
Most people have heard that bankruptcy laws changed significantly in 2005. Not all of the changes were negative to consumers, in particular the change making individual retirement accounts (IRA) and other retirements plans like 401(k)s completely exempt from the reach of bankruptcy trustees, who in turn would use such funds to pay other creditors.
The United States Supreme Court recently narrowed this exemption. In the case of Clark v. Rameker (decided June 12, 2014), the Supreme Court stated that individual retirement accounts inherited from another person as a beneficiary are not subject to this blanket exemption unless the inheriting party is the surviving spouse.
The Clark case means that individual retirement accounts inherited by children or others who were not married to the original IRA owner will be subject to the reach of bankruptcy trustees if the beneficiary files a bankruptcy.
If you want to discuss your bankruptcy and financial situation, experienced attorney Scott M. Amori of Amori & Associates would be glad to help. Please contact Attorney Scott M. Amori for a no obligation consultation at (570) 421-1406.