If you are planning to file bankruptcy and have inherited an IRA account from your parents, our Southeastern Wisconsin bankruptcy attorney wants you to be aware that your inherited IRA is not safe from creditors. A unanimous decision from the U.S. Supreme Court ruled earlier this month that inherited IRA accounts are not protected from creditors in bankruptcy proceedings.
Under normal circumstances, Wisconsin bankruptcy law protects retirement savings from creditors. However, in a case which involved a Wisconsin couple, the U.S. Supreme Court has declared otherwise when it comes to retirement savings which are inherited.
Heidi Heffron-Clark and her husband, Brandon Clark, declared bankruptcy, but wanted to shield their $300,000 IRA account from creditors. Heidi inherited the IRA account from her deceased mother. Heidi argued that the inherited IRA is still technically a retirement account because that is how her mother originally set-up the account. The bankruptcy judge disagreed; however, a federal district court reversed the ruling. The case then went to the 7th U.S. Circuit Court of Appeals where the court ruled against the couple. The U.S. Supreme Court finally heard the case and made the final decision, declaring inherited IRAs unprotected from creditors.
Southeastern Wisconsin Bankruptcy Attorney Discusses How The Inherited IRA Ruling Affects You
If you are planning to file a Southeastern Wisconsin bankruptcy and already have received an inherited IRA from a deceased family member, be prepared to disclose the amount. Depending on the amount of money in the IRA account and your current financial situation, you may need to use the monies to pay off creditors. If you are concerned about an inherited IRA fund being included in a bankruptcy, seek the advice of an experienced Southeastern Wisconsin bankruptcy attorney. An experienced Southeastern Wisconsin bankruptcy attorney will answer your questions, assess your current situation, and provide insight as to whether you will be able to keep your inherited IRA. Call our Southeastern Wisconsin bankruptcy attorney for a free consultation at 262-725-0175.
If you know you will be inheriting a large sum of money from a family member in the form of an IRA account, our Southeastern Wisconsin bankruptcy attorney advises to consider a consultation for filing for bankruptcy sooner than later. Time is of the essence. This is a matter you need to think about when considering the right time to file for bankruptcy.
Contact a Southeastern Wisconsin Bankruptcy Attorney
If you are considering bankruptcy and have inherited IRA questions, please feel free to contact our Southeastern Wisconsin bankruptcy office. Our Southeastern Wisconsin bankruptcy attorney offers a free initial consultation to discuss your current financial situation. Call our Southeastern Wisconsin bankruptcy office at 262-725-0175 to schedule your free consultation today.
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*The content and material on this web page is for informational purposes only and does not constitute legal advice.
Photo by Flickr Creative Commons Rafael J M Souza