Retirement Accounts: Creditor Protection?

Often clients are looking for ways to protect there assets from creditors and have questions about whether their IRA provides any protection.

The answer is that retirement accounts are protected from creditors to varying degrees under state and federal bankruptcy laws. This includes most IRA accounts.

However, there is one situation that has recently been changed that investors should understand. Recently the U.S. Supreme Court case of Clark vs. Rameker, June 12 2014, held that Inherited IRA's are NOT protected in bankruptcy. The ruling was made after the court decided that Inherited IRA's are not retirement accounts and thus not eligible for creditor protection.