When petitioners filed for Chapter 7 bankruptcy, they sought to exclude roughly $300,000 in an inherited individual retirement account (IRA) from the bankruptcy estate using the “retirement funds” exemption. See 11 U. S. C. §522(b)(3)(C). The Bankruptcy Court concluded that an inherited IRA does not share the same characteristics as a traditional IRA and disallowed the exemption. The District Court reversed, explaining that the exemption covers any account in which the funds were originally accumulated for retirement purposes. The Seventh Circuit disagreed and reversed the District Court.
After hearing the case, the US Supreme unanimously upheld the judgment of the United States Court of Appeals for the Seventh Circuit and that judgment was affirmed. (Clark v. Rameker, U.S. Supreme Court, Case No. 13-299)