Watch out for Inherited IRAs

Florida bankruptcy attorneys know that there is an exemption in Florida for IRAs that protects the assets from creditors. As a Fort Lauderdale bankruptcy attorney, I recognize the critical importance of protecting exempt assets. But recent case law must give practioners cause to be careful. Though an IRA is exempt, and apparently so is the spouse’s interest upon the death of the IRA owner, what about the IRA that is inherited by another relative? A recent bankruptcy decision held that the inherited IRA is not exempt. In re Szmansky, 2010 WL 3400368,(Bankr. MD FL Aug. 19, 2010) relied on a recent Florida state court decision interepreting Florida Statute 222.21(2), Robertson v Deeb, 16 So.3d 936( Fla. 2d DCA 2009).

Florida bankruptcy attorneys must be alert to the issue of inherited IRAs.



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