Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

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Saturday, July 5, 2014

Standalone Retirement Trusts May be the Replacement for Inherited IRAs

IRAAs I have previously discussed, the Supreme Court found in Clark v. Rameker that inherited IRAs are not protected in Bankruptcy.  The court decided that inherited IRAs are different from participant-owned IRAs because they can no longer be contributed to, they require minimum distributions despite the age of the beneficiary, and all of the funds may be withdrawn without penalty. By considering what makes an inherited IRA different, IRA holders can avoid the outcome in Clark by creating a Standalone Retirement Trust rather than designating beneficiaries of their IRA. The Trust acts for the benefit of beneficiaries while protecting the funds from creditors and financially irresponsible beneficiaries.

See, How to Protect Inherited IRAs After the Clark v. Rameker Decision, Altman Speaks, June 2, 2014.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

http://lawprofessors.typepad.com/trusts_estates_prof/2014/07/standalone-retirement-trusts-may-be-the-replacement-for-inherited-iras.html

Estate Planning - Generally, Non-Probate Assets, Trusts | Permalink

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