A headline in the Wall Street Journal recently read: “High Court Rules IRAs Untouchable.” This headline was prompted by a recent U.S. Supreme Court case (Rousey v Jacoway) which held that creditors may not execute on individual retirement accounts (IRAs) in a bankruptcy proceeding. This decision has been hailed as a huge victory for IRA owners.

But for IRA owners in Pennsylvania, this case does not significantly change the protection which IRA owners have enjoyed for several years. Under Pennsylvania law, a debtor may choose to exempt his assets under either the state’s exemption laws or the federal exemption laws under the Bankruptcy Code. Since Pennsylvania law has for years exempted IRAs from creditor execution except in limited situations, most debtors in Pennsylvania elect to use the state’s exemption laws which means that the recent Supreme Court case will have no impact on IRA owners in Pennsylvania.

The Rousey case, however, should cause all IRA owners to examine the beneficiary designations of their accounts as well as other options to protect their assets from their creditors.

For additional advice on this matter, please contact Chuck Vater.