IRA owners consider new threat from Supreme Court ruling

A recent Supreme Court  decision seems to leave IRA account assets vulnerable to the claims of health care providers, even in the event of bankruptcy of the owner (Health care costs are believed to be the most common primary cause of personal bankruptcy, especially late in life). The ruling affects inherited IRAs. Industry data indicates that the majority of IRA assets are intended to be passed on to beneficiaries rather than spent down for support of the owner. So if you want to leave an IRA to children, it seems necessary to rethink your financial planning. Since this news has just arrived on planners’ doorstep, there is no consensus of opinion as to how we should react. One attorney suggests using a trust rather than an IRA. Others will likely recommend using life insurance to pass on assets outside the reach of creditors. Employee Benefit News wrote “The Supreme Court decision is an emphatic reminder that care must be taken to maintain appropriate beneficiary designations for all retirement plan accounts. That special attention must be paid to retirement funds when planning one’s estate and that estate plans must be reassessed periodically as financial and familial circumstances change.”