Inherited Roth (Non-Spousal) General Creditor Protection
I am looking for resources or answers that would help determine if assets held in an Inherited Roth IRA (where the account owner is a non-spousal beneficiary) are protected against the claims of general creditors in the State of Michigan.
Permalink Submitted by Alan - IRA critic on Fri, 2017-03-24 18:33
It is generally the case that non spouse inherited IRAs do not have creditor protection since the Supreme Court Decision a few years back. However, some states have amended their state statutes to specifically exempt such inherited IRAs from creditors. It is not clear whether MI has done that or not. MI goes provide complete protection for owned TIRA and Roth IRAs.
Permalink Submitted by Bruce Steiner on Fri, 2017-03-24 21:27
Here’s the statute: http://www.legislature.mi.gov/(S(jtv51t51jrbxb2czeazphbad))/mileg.aspx?page=getObject&objectName=mcl-600-6023. If you’re not sure, leave it in trust rather than outright. Leaving it trust will also keep it out of the beneficary’s estate for estate tax purposes, and will better protect it against the beneficiary’s spouses and Medicaid.