For those who have designated their children and/or grandchildren as the contingent beneficiaries of the IRA or 401(k) plans and have assumed, as has been the case for many years, that such plans would Provide Liability Protection for the designees, such is NOT the case.  In June of last year the Supreme Court rules that such “inherited” retirement plants would NOT provide liability protection should the recipient wind up in bankruptcy court. (Clark v. Rameker, 573 U.S. 6-12-14).  For inherited retirement plans to provide liability protection for the designated heir, such plans must now provide for distribution to a Trust which contains SPECIFIC protective distributive provisions. Attorney Natalie Choate states: “The prudent thing to do is not to leave the IRA outright to the child.”