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SUPREME COURT RULES INHERITED IRAs ARE NOT PROTECTED

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On June 12, 2014, the United States Supreme Court unanimously ruled that individual retirement accounts (IRAs) left to a non-spouse beneficiary are not protected from bankruptcy proceedings. As a result of this decision, individuals who have inherited IRAs are now confronted with the prospect of not having these assets protected from creditors when filing for […]

On June 12, 2014, the United States Supreme Court unanimously ruled that individual retirement accounts (IRAs) left to a non-spouse beneficiary are not protected from bankruptcy proceedings. As a result of this decision, individuals who have inherited IRAs are now confronted with the prospect of not having these assets protected from creditors when filing for bankruptcy. Thus, Inherited IRA's are not protected

Hedi Heffron-Clark inherited an IRA worth about $300,000 when her mother died in 2001. In October 2010 she filed for bankruptcy protection. In Clark v. Rameker, the Supreme Court ruled that inherited IRAs do not enjoy the same protection that traditional IRAs do and are not considered “retirement funds”. Therefore she could not shield these funds from her creditors. Thus, Inherited IRA's are not protected.

Had she contacted us and established an IRA Inheritance Trust, the money would have been protected from her creditors. If there is one lesson to be learned from this case it is not what you own that matters, but how you own it.

Benjamin D. Eckman’s practice focuses on Estate Planning & Elder Law – legal issues facing senior citizens. Benjamin D. Eckman received his Bachelor’s Degree in Business/Accounting from Touro College and his law degree from Seton Hall University School of Law. He is a member of the New York State Bar Association, the New Jersey State Bar Association, the National Academy of Elder Law Attorneys, the Elder Law Section and Real Property, Probate and Trust Section of the New Jersey State Bar Association, the Union County Bar Association, Passaic County Bar Association and the Bergen County Bar Association. He can be reached at (973) 709-0909, (908) 224-4357 or (201) 263-9161.

Law Firm of Benjamin Eckman
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1767 Morris Ave., Suite 314
Union, NJ 07083

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73 Mt. View Blvd., Wayne, NJ 07470
(973)709-0909

1 University Drive, Suite 609
Hackensack, NJ 07601

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Union Office

1767 Morris Ave., Suite 314
Union, NJ 07083

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Wayne Office

By Appointment Only:

73 Mt. View Blvd., Wayne, NJ 07470
(973)709-0909

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Hackensack Office

1 University Drive, Suite 609
Hackensack, NJ 07601

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