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My husband inherited an ira from his dad and never claimed it. Hubby died and now money in estate ira -is subject to creditors?

Stoughton, MA |

Hubbys father died oct 2010 and then husband died June 2011. We never got the money officially. Hubby had 16K in credit card debt i didnt know about at all. I do not plan on paying it. Father's estate planner moved the money to my hubbys estate - STILL AN IRA - i had to create a small estate in order to get the money moved (5K) - i am the executor.

Do i need to pay the creditor - or since its an ira am i protected?

I am not named as a beneficiary for this money -- since he inheirited it.

Attorney Answers 4


  1. Without seeing the fathers and your husbands estate documentation it is difficult to formulate an answer to this question. Please consult with a probate attorney in your area, and bring all documentation for both estates with you. Best of Luck.

    Legal disclaimer: DISCLAIMER This answer is provided for educational purposes only. By using or participating in this site you agree and understand that there is no attorney client privilege between you and the attorney responding. This site cannot be used as a substitute for competent legal advice from a licensed attorney that practices law in the State where this offense is charged and/or wherein the legal issue arises; and, who has experience in the area of law you are asking questions about and with whom you would have an attorney client relationship. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question, or in the State in which your particular issue has arisen.


  2. I agree with the answer provided by the other attorney. You should meet with a probate attorney to review the respective documents. If your husband's estate is the beneficiary of his retirement account, the funds will be included in his probate estate and subject to his creditors. There also are income tax consequences as a result of your husband's retirement account funds being paid to his estate.

    Legal Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on since each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship. A lawyer experienced in the subject area and licensed to practice in the jurisdiction should be consulted for legal advice. Circular 230 Disclaimer: Any information in this answer may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.


  3. If the estate is recipient of the IRA monies it becomes part of the probate estate and is subject to the claims of creditors. It basically losses its usual exemption from creditor claims. You need to pay creditors with the IRA money. Remember that debts must be paid before any beneficiaries of the estate, so if the estate is insolvent no beneficiaries get an inheritance.

    For an example of which debts need to paid and in what priority please see my article entitled Pennsylvania Probate: What Debts Take Priority at the following link: http://www.sjfpc.com/PA_Probate_Law_Section_3392_Estate_Debt_Priorities.html. Although this relates to PA law, in most states this is what needs to be done before beneficiaries can be paid.

    Hope this helps.

    Please remember to designate a best answer to your question.

    Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is sjfpc@comcast.net , his website is www.sjfpc.com. and his blog is

    LEGAL DISCLAIMER Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is sjfpc@comcast.net , his website is www.sjfpc.com. and his blog is <http://frommtaxes.wordpress.com/> Mr. Fromm is ethically required to state that the response herein is not legal advice and does not create an attorney/ client relationship. Also, there are no recognized legal specialties under Pennsylvania law. Any references to a trust, estate or tax lawyer refer only to the fact that Mr. Fromm limits his practice to these areas of the law. These responses are only in the form of legal education and are intended to only provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that if known could significantly change the reply or make such reply unsuitable. Mr. Fromm strongly advises the questioner to confer with an attorney in their state in order to ensure proper advice is received. By using this site you understand and agree that there is no attorney client relationship or confidentiality between you and the attorney responding. This site should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area in your jurisdiction, who is familiar with your specific facts and all of the circumstances and with whom you have an attorney client relationship. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question or omitted from the question. Circular 230 Disclaimer - Any information in this comment may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.


  4. The income tax issues involving the IRA are interesting, but the threshold question is whether those credit card companies will follow the rules that protect estate beneficiaries. Often, they don't file the necessary papers in the proper courts, within the required time frame. For links to the current laws, and new laws that take effect April 1, 2012, click here:

    http://estateplansplus.com/html/probate_personal_rep.html

    A visit with a Massachusetts Probate attorney will help you protect your interests.

    John L. Roberts
    Elder Law, Estate Planning, Probate and Disability Law
    Longmeadow, Massachusetts

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