Earlier this month, the Supreme Court issued a unanimous ruling
in Clark v. Rameker, 573 U.S. __ (2014) (a .pdf of the
opinion is located here) holding that inherited IRAs do
not qualify for the retirement funds exemption in 11 U.S.C.
522(b)(3)(C).
Section 522(b)(3)(C) permits a debtor to exempt from property of
the estate the following:
"retirement funds to the extent that those funds are in a
fund or account that is exempt from taxation under section 401,
403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of
1986."
An "inherited IRA" is a category of retirement account
that is specified in 26 U.S.C. 408A(d)(3)(C)(ii), and which
constitutes "a traditional or Rother IRA that has been
inherited after its owner's death." See Clark at
2. If the account owner's spouse is the inheritee, he or she
may elect to either roll the funds into his or her own IRA, or may
keep the money in an "inherited IRA" subject to several
rules and restrictions. If a
