Skip to main content
(678) 915-2634 Contact Us
Supreme Court rules some IRAs not protected in bankruptcy Atlanta, GA

Personal Attention & Experience Since 1971 Family-Owned, Family Focused

Client Reviews

Supreme Court rules some IRAs not protected in bankruptcy

Judge Gavel, Scales of Justice and legal books on the desk

Back in April, we posted about a legal challenge that had made its way to the U.S. Supreme Court. It involved a question over whether funds in certain inherited individual retirement accounts are provided protection from creditors during bankruptcy proceedings. The answer is now in.

What the high court has ruled is that some inherited IRA money doesn’t constitute “retirement funds” that would be shielded under the Bankruptcy Abuse Prevention and Consumer Protection Act signed into law in 2005. 

The appearance of that two-word phrase in the law had proven to be the source of contention in many bankruptcy proceedings since BAPCPA was enacted. Split decisions from various courts on the issue did little to clear the air, so from that perspective the Supreme Court’s decision is likely be welcomed by some.

The unanimous decision by the justices doesn’t explicitly say so, but the thinking by many analysts is that it only applies to IRAs inherited by a beneficiary other than the spouse of the original IRA owner. That’s based on the fact that the test case that triggered the ruling involves a 35-year-old woman who had inherited a $300,000 IRA from her mother.

She filed for Chapter 7 bankruptcy in 2010 and listed the IRA as an exemption, claiming it held retirement funds. But the Supreme Court ruled the term can’t apply. It said that because the woman can draw on the funds any time she wants, the funds don’t fit the definition as being restricted for retirement.

The implications of the ruling are not cut and dried. Analysts suggest there could be any number of possible options that might allow beneficiaries of inherited IRAs to still protect them in the event of bankruptcy. If you are in a situation where such issues are at play, you should be sure you know and understand what options exist. The best way to do that is to work with experienced legal counsel.

Source: MarketWatch, “Inherited IRAs lose bankruptcy protection,” Jeffrey Levine, June 13, 2014

Posted on behalf of Jamie L. Gingold, PC

195 14th Street NE #1604
Atlanta, GA 30309

Phone: (678) 915-2634


First Free

    DisclaimerPrivacy Policy

    I have read the Disclaimer and Privacy Policy

    Our Client Reviews

    Jamie L. Gingold, PC
    5.0 / 5.0

    Based on 28 reviews

    Jack L.

    They did an excellent job with my case. Jamie took the time to really listen and understand things. She delved into the details and was extremely knowledgeable and non judgmental. Very professional and they know what they are doing. Would definitely recommend!

    Karen B.

    Dear Mr Gingold, There are so many reasons to be thankful for all you have done and will do. Anyone who has ever had unfavorable experiences with an attorney or the legal system will feel the trepidation that I experienced once I realized that my situation seemed hopeless. It was by chance and happily good luck that I decided to put my future and sanity into your hands. I was mortified at having to deal with my debts by claiming bankruptcy. I remember in our first meeting how you assured me that I was not alone and should not feel ashamed. And, anyone in this position obviously does not have money to spare and you were clear about all the costs and allowing me to pay according to my own ability to do so. You advised me in all aspects of the law, but also, you were at each meeting incredibly supportive and complementary of my personal and professional plans. Anyone else in this situation should feel blessed to have access to your expertise and support.

    Lyla B.

    I thought the process of filing bankruptcy was going to be a difficult one. However, Gingold & Gingold treated me with respect and dignity from the moment I walked through their door. I had the pleasure of working with Jamie. She is very responsive, professional, and knowledgeable. She took the time and listened to my every concern and handled each and every one of them to my satisfaction. My experience with filing bankruptcy under Gingold & Gingold's representation exceeded my expectations in a major way. They gave me such a peace of mind. I am very pleased with my decision of going with Gingold & Gingold to represent me when I filed Chapter 13 bankruptcy.

    Julie T.

    Wow! I am finally out of debt and can say that I am debt free after completing my chapter 7 bankruptcy case with Gingold and Gingold. Mr dangled was very knowledgeable and direct with regard to my debt situation. there were no surprises and the case went as I was advised. The staff was also very helpful whenever I had a question. I will definitely recommend them in the future to my friends.

    Julie T.

    I contacted getting old and getting old regarding some old tax debt and credit card debt that I needed to address and had been putting off. miss Irving in the office was very very nice and put me at ease. I met with Jaime Gingold. She was very nice and explained the procedure to me and what would be left owing to the Internal Revenue Service and the State of Georgia after my case was done. My case has now been completed and I am on my way to a new start. Thank you Gingold and Gingold for all of your help.

    Anna T.

    Amazing! Outstanding!! They went over and beyond..I would recommend them to anyone needing a lawyer!!

    Write a review