Case Conclusion Date: 01.19.2011
Practice Area: Chapter 7 bankruptcy
Outcome: The total amount of the funds in the IRA are exempt under 33-1126(B), 33-1126(A)(1) and 522(b)(3)(C).
Description: Debtors filed chapter 7 bankruptcy in 2010. Five years earlier a parent of one of the Debtor's died. The decedent owned a traditional IRA and Debtor was named as a designated beneficiary. The transfer of the funds to debtor was a trustee to trustee transfer so the funds were never in possession of the Debtor. The Debtor also complied with the rules regarding mandatory withdrawals and the new account was titled in the name of the Debtor and the decedant. Debtors claimed exemptions and the bankruptcy Trustee objected.The exemptions at issue are 33-1126(b), 33-1126(A)(1) and 522(b)(3)(C)