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Author: inparadise Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76241  
Subject: Inherited IRAs Date: 6/12/2014 4:01 PM
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http://blogs.marketwatch.com/encore/2014/06/12/scotus-inheri...

The Supreme Court on Thursday ruled unanimously that inherited Individual Retirement Accounts are not afforded the same protection from creditors in bankruptcy proceedings as retirement assets held by the original owner,...

Probably bankruptcy is not an issue for any here, but I wonder if this will be the start of the erosion of beneficial treatment for these accounts. There has already been talk by Obama about making beneficiaries take money out within 5 years of inheriting. Something to keep in mind as you plan your asset allocation to different accounts.

IP
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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 75204 of 76241
Subject: Re: Inherited IRAs Date: 6/12/2014 5:10 PM
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inparadise: "
http://blogs.marketwatch.com/encore/2014/06/12/scotus-inheri......

{{{The Supreme Court on Thursday ruled unanimously that inherited Individual Retirement Accounts are not afforded the same protection from creditors in bankruptcy proceedings as retirement assets held by the original owner,...}}}

Probably bankruptcy is not an issue for any here, but I wonder if this will be the start of the erosion of beneficial treatment for these accounts. There has already been talk by Obama about making beneficiaries take money out within 5 years of inheriting. Something to keep in mind as you plan your asset allocation to different accounts."


Congress could fix this issue if it wante to fix it (though the cynic in thinks that the Congress will not because it will love the tax revenue boost resulting from quicker withdrawals from inherited IRAs).

People with inherited IRAs might even condering withdrawing enough, so that after tax, they can contribute the maximum to their own IRAs, 401-k plans, Keough plans, etc. The income tax paid is the vig for gaining bankruptcy protection.

Regards, JAFO

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Author: BruceCM Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 75205 of 76241
Subject: Re: Inherited IRAs Date: 6/13/2014 1:29 AM
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Keep in mind, one's own IRA, including one inherited for a spouse and rolled into the surviving spouse's IRA, are clearly defined by the The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, in terms of protection from creditors for purposes of Federal Bankruptcy up to $1MM...although by individual state rules, they may be subject to judgements, although I believe this will depend on the state.

ERISA protects all qualified retirement plans from creditors, with the exception of former spouses and certain tax liens (rare). If you don't believe this, the next time you're in Reno NV, drop over to the Lovelock (yes, that's its real name) Correctional Center just outside of town and ask O.J. Simpson how his NFL Pension is doing.

BruceM

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