In this decision dated 8/14/2009, a Florida district court of appeal allowed a creditor to seize inherited IRA funds, undermining the special creditor protection afforded to Individual Retirement Accounts under Florida Statute Section 222.21(2)(a). Mr. Robertson was the death beneficiary of his father's IRA. Robertson chose to receive the funds as an inherited IRA rather than take the money outright. Robertson later defaulted on a promissory note and had a judgment levied against him. The creditor garnished Robertson's inherited IRA account. The court said that the person making contributions to the IRA (Robertson's father) enjoys creditor protection on his IRA account under F. S. Section 222.21(2)(a), but this protection is not applicable to someone who inherits the account (Robertson). Therefore, the creditor was able to take away from Robertson the IRA funds which he inherited from his father. We have a solution for your clients who wish to protect their IRA wealth on behalf of their beneficiaries. If, during his lifetime, Mr. Robertson's father had set up a sole-purpose revocable IRA trust for the benefit of his son, these inherited IRA funds could have been protected from his son's judgment creditors. Via the IRA trust, Robertson would have enjoyed optimal income tax elections on the inherited IRA funds, as well as asset protection. The result in this case is unfortunate as it was avoidable. 

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