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Are Inherited IRAs Protected from Creditors in Bankruptcy?

During a participant’s lifetime, his or her IRA is considered “retirement funds” that are protected from the participant’s creditors, even if the participant files bankruptcy.   But, what happens to the creditor protection after the participant’s death?  Is the IRA now protected from the beneficiary’s creditors?  Whether post-death creditor protection is available to inherited IRAs under the 2005 Bankruptcy Act has been the subject of a number of cases decided in the last year.

The argument made by bankruptcy trustees is that, on the death of the initial IRA owner, the IRA ceases to be “retirement funds”, as it is not the retirement funds of the beneficiary, and therefore loses the protection afforded to the IRAs under the Bankruptcy Code.

Tax Patents Banned

Tax Patents Banned

October 7, 2011

Authored by: Kathy Sherby and Stephanie Moll

Under the American Invents Act passed by Congress on September 8 of this year and signed into law by President Obama, among the many patent reforms is a ban on patenting any strategy for reducing, avoiding, or deferring tax liability, whether known or unknown at the time of the alleged invention or patent application (with certain limited exclusions related to software technology).  This type of patent application will no longer be able to be filed or prosecuted with the U.S. Patent and Trademark Office.

In essence, this legislation stated that tax strategies are indistinguishable from prior strategies and therefore cannot be patented as a novel or non-obvious invention.

It is important to note that this legislation does not invalidate any patents that have already been issued by the U.S. Patent and Trademark Office, which continued to issue such patents as late as the week immediately prior to the passage of