"In Clark, et ux v. Rameker, 573 U. S. ____ (Jun, 12, 2014), the U.S. Supreme Court unanimously held that funds held in inherited IRAs are NOT protected as “retirement funds” within the meaning of Bankruptcy Code Section 522(b)(3)(C) of the federal bankruptcy code." (Thank you WealthManagement.com http://bit.ly/1nos60k)
In a surprisingly sensible decision, the Supremes used these tests to determine that Inherited IRAs do not deserve the protections afforded retirement accounts under IRS code:
Unlike other retirement accounts, Inherited IRAs have these unique features:
- The holder of an inherited IRA may never invest additional money in the account.
- Holders of inherited IRAs are required to withdraw money from the accounts, no matter how far they are from retirement.
- The holder of an inherited IRA may withdraw the entire balance of the account at anytime—and use it for any purpose—without penalty.