Wills, Trusts & Estates Prof Blog

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

Thursday, November 5, 2020

Creditor Protections for Inherited IRA Benefits and the Proposed Harmonization of Protections for Savings and Retirement Benefits Act

Albert Feuer has just posted his article entitled Creditor Protections for Inherited IRA Benefits and the Proposed Harmonization of Protections for Savings and Retirement Benefits Act which appeared in the Summer-Fall 2020 issue of te NYSBA Trusts and Estates J. Here is the abstract of his article:

There is ambiguity whether New York law permits a judgment creditor to enforce its claim against the debtor’s interest in an inherited individual retirement account (IRA). In contrast, some states have enacted legislation that protect inherited IRAs from creditors of a beneficiary. The article discusses New York protections for a debtor’s savings and retirement Benefits and the only Court decisions considering whether a creditor may enforce a claim against the judgment debtor's interest in an inherited IRA. Those decisions are all recent and find that such claims are enforceable. Although, the article argues that such decisions are unconvincing, they must be considered carefully by debtors and creditors. Thus, estate planners often recommend naming a spendthrift trust as the IRA beneficiary in order to protect the individual beneficiaries from their creditors.

https://lawprofessors.typepad.com/trusts_estates_prof/2020/11/creditor-protections-for-inherited-ira-benefits-and-the-proposed-harmonization-of-protections-for-savings-and-retirement-bene.html

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