NC Supreme Court Decision Kinlaw V. Harris IRA Exemption Case
I previously blogged about the ruling by the North Carolina Court of Appeals that in addition to IRA accounts being exempt from creditors, distributions from IRAs were also exempt. On appeal, the North Carolina Supreme Court held that “there may be some circumstances under which withdrawn funds are no longer exempt from execution.”
The Court stated that the trial court had acted within its broad equitable power when it approved a framework that the parties had established on their own to determine the exemption status of any IRA withdrawals. The Court then affirmed the Court of Appeals in its ruling that IRAs are exempt from the owner’s creditors, but it reversed the other part of the appellate court’s decision that had invalidated the escrow agreement. The Supreme Court then ordered the case remanded to the appellate court for additional proceedings. Kinlaw v. Harris, No. 20A10, N.C. 11/5/10
