Crushing Debt Podcast
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Episode 180:Inherited IRAs are Not ExemptThis week’s Crushing Debt Podcast Episode is inspired by a few financial advisors we know, including past guests like Forrest Baumhover, and our sponsor, Chris Calandra with Elliot Wealth Management Services.
When someone files bankruptcy, their concern is “what can I keep?” That question is answered by reviewing the debtor’s exemptions - those things protected under State or Federal Law. One of the items protected is IRAs, Individual Retirement Accounts.
However, the United States Supreme Court came out with a ruling that not all IRA’s are protected. IRA’s that are inherited, while exempt from withdrawal penalties, are not protected under the bankruptcy code. Meaning, if you inherit an IRA and have to file bankruptcy, that IRA will have to be paid to the bankruptcy trustee to repay creditors (unless some other exemptions apply).
In this week’s episode, we discuss the logic behind the Supreme Court’s decision.
Do you agree? Do you think inherited IRA’s should be exempt, or subject to repay creditors? Let me know at Shawn@YesnerLaw.com or www.YesnerLaw.com.
