Creditor Claims on Retirement BenefitsCreditor Claims on Retirement Benefits

Thomas C. Foster

Four recent court decisions shed some new light on certain situations clients may encounter in dealing with creditors' claims on individual retirement accounts and employer sponsored tax-qualified retirement benefits. Three of those were bankruptcy court decisions dealing with inherited IRAs (Nessa, Chilton and Tabor).¹ The courts in those cases reached differing conclusions concerning whether IRAs inherited by the original owners' daughters are entitled to the same exemption that would have pertained to IRAs of the living original owners. One case was from the Tax Court (Wadleigh).² That decision illustrates that an individual's retirement benefits may be, with the wrong fact situation, vulnerable post-bankruptcy for his...