Estate Planning

NC Court of Appeals Holds IRA Withdrawals Exempt from Creditors

By Greg Herman-Giddens

The North Carolina Court of Appeals, in Kinlaw v. Johnson, confirmed statutory law protecting IRAs from creditors, and extended the protection to the account owner's legal use of IRA funds from collection on a creditor's judgment.  The court stated:

"We therefore hold, liberally construing the statute in favor of Defendant, Elmwood, 295 N.C. at 185, 244 S.E.2d at 678; Laughinghouse, 44 B.R. at 791, that N.C. Gen.Stat. § 1C-1601(a)(9) exempts Defendant's IRAs and Defendant's legal use of funds contained within those IRAs, from Plaintiff's judgment. As the issue is not before us, we do not make any holding regarding any question concerning contributions Defendant may have made, or may in the future make, to his IRAs." (Emphasis added.

Michael Kinlaw, Plaintiff, v. John J. Harris, Jr., M.D., Defendant, NC App No. COA08-1584, December 08, 2009

Full post as published by North Carolina Estate Planning Blog on September 16, 2010 (boomark / email).