Creditor protection of the assets of an IRA

January 25, 2017 -

The general rule is that an IRA which you created or inherited from your spouse is 100% protected from creditors in bankruptcy or general creditors.  If, however, you inherit an IRA from a third party,

then based upon a recent Supreme Court decision, the proceeds from that IRA are no longer protected from creditors of your bankruptcy.  A suggested way around this problem would have been for the owner of the IRA to create a spendthrift trust and leave the proceeds of the IRA to that trust. If you inherit an IRA and have creditors you should meet with an attorney.