Robert T Abney & Associates bankruptcy law, commercial law: Inherited IRAs
lose bankruptcy protection
In a landmark decision Thursday, the Supreme Court ruled unanimously, 9-0, that inherited IRAs are not
protected in bankruptcy under federal law.
The...
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Robert T Abney & Associates bankruptcy law, commercial law: Inherited IRAs
lose bankruptcy protection
In a landmark decision Thursday, the Supreme Court ruled unanimously, 9-0, that inherited IRAs are not
protected in bankruptcy under federal law.
The decision has far reaching ramifications and, depending on your heirs' specific circumstances, may
give you pause as to who — or what — is the best beneficiary for your retirement accounts.
A bit of background
In 2005 President Bush signed into law the Bankruptcy Abuse Prevention and Consumer Protection Act
(BAPCPA). While, on the whole, the law was designed to make filing for bankruptcy less appealing, it had
a silver lining for retirement account owners. BAPCPA afforded a great deal of bankruptcy protection to
"retirement funds," providing IRAs and Roth IRAs with a cumulative $1 million inflation-adjusted
(currently $1,245,475) exemption and employer-sponsored plans with an unlimited exemption.
While that may seem fairly straightforward,
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