In the Matter of Clark

Federal 7th Circuit Court
Civil Court
Case Number: 
Nos. 12-1241 & 12-1255 Cons.
Decision Date: 
April 23, 2013
Federal District: 
W.D. Wisc.
Dist Ct. erred in reversing Bankruptcy Court order finding that debtors’ inherited IRA worth approximately $300,000 did not represent “retirement funds” in hands of debtors, and thus was not exempt from distribution to creditors under section 522(b)(3)(C). While Dist. Ct. found that any money representing “retirement funds” in decedent’s hands must be treated in same way in successors’ (debtors’) hands, Ct. of Appeals held that said funds were not exempt since inherited IRAs represent opportunity for debtor to currently spend funds and thus are not savings reserved for use after debtor stopped working.