Inherited IRAs Not Exempt From Bankruptcy Claims: 7th Circ.

Law360, Los Angeles (April 23, 2013, 4:53 PM EDT) -- The Seventh Circuit ruled Tuesday that an individual retirement account a Wisconsin woman inherited from her deceased mother was not exempt from bankruptcy claims because the funds began distribution before the daughter retired and therefore didn't qualify as her own retirement savings.

Reversing a lower court ruling and disagreeing with Fifth Circuit precedent, a three-judge panel said inherited IRAs aren't protected by a federal law that prevents bankruptcy creditors from claims against retirement funds, including traditional IRAs.

The ruling means that creditors can go after money...
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