Benefits of IRA Trusts Posted in Taxation

Designed to inform both the general public, and legal professionals alike, this blog serves as a forum to discuss issues surrounding trusts and estate litigation, estate planning, elder law, estate & gift tax, and other areas dealing with the administration of estates and probate. In this blog post, they tackle the issue of inherited IRAs.


U.S. Supreme Court Ruling Regarding Inherited IRAs Highlights the Benefits of IRA TrustsPosted in Taxation

Last Thursday, the United States Supreme Court ruled in Clark v. Rameker that funds held in inherited individual retirement accounts (IRAs) are not “retirement funds” for bankruptcy purposes.

In October 2010, the Clarks filed for bankruptcy and claimed that Heidi Clark’s $300,000 inherited IRA was exempt from their bankruptcy estate under Section 522 of the Bankruptcy Code (which provides that tax-exempt retirement funds are exempt from a bankruptcy estate). The bankruptcy trustee and creditors objected to this, taking the position that the funds were not “retirement funds” within the meaning of Section 522. The Bankruptcy Court agreed with the trustee and creditors.
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