As we wrap up the Fourth of July festivities, and as someone who appreciates American history, I cannot recall a more divided nation since my youth in the 1960s.
All around the world there are hot spots that could ignite into major
violence at any moment. Here at home, it’s difficult to have much
confidence in our government. There’s been a never-ending parade of
scandals, incompetence and what appears to me as arrogance from our
elected officials when they’re questioned about such issues.
In conversations with friends and clients, I continue to hear people
wonder what happened to our country, and express serious concern as to
what lies ahead. It’s clear to me that people are both worried and
skeptical about the direction in which our nation is headed.
Meanwhile, the investment world appears to be cautiously watching the
overseas conflicts without too much reaction. While sentiment hasn’t
sent it in a downward direction, investors seem to be reluctant to put
new money into the stock market. This is supported by the influx of
scared money coming into America from overseas and finding its way into
the relative safety and security of real estate and U.S. Government
Domestically, although the stock market remains high, the volume of
trading on Wall Street is down significantly. In other words, if stock
trading were a game, only a few are showing up to play. So, while the
big players may still be active, the moms and pops throughout the
country appear to be content to just stand on the sidelines.
Is this the calm before the storm? Or will the investment world continue
to move up quietly and leave a lot of people behind? It’s not easy to
predict the future, but right now confidence is definitely lacking
throughout the world.
With all that’s happening overseas and scandals dominating our domestic
news, it was easy to miss a recent U.S. Supreme Court decision that
could impact not only my readers, but also everyone that owns an
Individual Retirement Account.
On June 12, the Supreme Court ruled that inherited IRA accounts do not
qualify as retirement funds and, as such, do not receive creditor
Before panic sets in, keep in mind that this ruling pertains only to
inherited IRA accounts. Your existing IRA accounts, those to which you
make contributions, are still protected from creditors, as is your
In most instances, inherited IRA accounts are those that are passed down
to someone other than a spouse. The Supreme Court ruling was based on
their interpretation that “retirement funds are funds set aside for the
day an individual stops working.”
In fact, that’s the very reason why IRA funds are protected from
creditors. However, the Supreme Court stated that inherited IRAs
“represent an opportunity for current consumption, not a fund for
In non-legal terms, this means that when your son or daughter or
grandchild inherits your IRA after you and your loved one are gone, they
still maintain control, but the funds are no longer considered sacred,
and therefore not protected from creditors.
Ultimately, there will likely be plenty of scrambling by estate planning
attorneys to modify various documents. An already confusing and complex
financial world just became a bit more so.