Your Retirement Funds May Be At Risk…(and you don’t even know it)

August 9, 2014 - Posted by: admin - In category:

taxes - No Responses

A recent decision by the United States Supreme Court has drastically changed the landscape of retirement planning and the protections afforded to many retirement accounts.

In the Clark v. Rameker decision, the U.S. Supreme Court unanimously held that an inherited IRA does NOT qualify as “retirement funds” that are protected under Section 522(b)(3)(C) of the Bankruptcy Code.  This means that an inherited IRA passing from spouse to spouse, or from parent to child, for example, can be subject to claims of creditors in the bankruptcy of such inheriting spouse or child.  This also could open to the door for other creditor to access such inherited IRA monies.  In short, this decision from the Supreme Court has sent shockwaves through the financial industry (at least for those paying attention) and now, more than ever, makes it a matter of urgency for holders of retirement accounts to get good legal and financial advise with respect to such accounts.

In summary, there are at least 3 important takeaways from this decision:

1.  Inherited IRAs are NOT protected from creditors

2.  Surviving spouses should consider a spousal rollover even if they have not reached age 59 1/2

3.  Qualified beneficiary trusts are more important than ever.

Please call us to find out more and/or to receive a free copy of our report on this decisions and related issues.

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