Attorney has me as 13 wants me to buy IRA's

[5yrplan]

I have about $8k inheritance my attorney wants me to buy IRA's with but I read IRA's cant be bought with inheritance because the IRS doesn't allow that. Could I buy term life instead?
Thanks

[justbroke]

This is a legal question that only an attorney should answer. If your bankruptcy attorney seems as though they may be making a mistake, you may want to consult with another asset protection attorney.

[LadyInTheRed]

I am not sure this is a legal question of whether it is okay to use the inheritance to buy an IRA in order to create an exempt asset in the BK. 5yrplan appears to have already been advised by his attorney to do that. I agree it is a verry good idea to get a second legal opinion.

If this is a question of whether you can buy an IRA using something other than your income, regardless of the fact that you are about to file BK, it is more of a tax questiosn. I don't know all of the rules, but, depending on your other retirement investments during the year, you may be able to put money into a qualified IRA up to a certain amount. I don't think it matters where the money comes from. My mother gave my husband and I both cash gifts a few years ago. He put his in an IRA because he had no other retirement assets.

ETA: I want to clarrify that I think you do have to have earned income during the year to invest in an IRA. But, I don't think the actual source is traced. So, if you earn $8,000 during the year, you can invest $8,000, or at least some portion of it. There are limits and I don't know what they are.

[5yrplan]

Thats correct as long as you have earned it you can buy it. Limits after 50 years of age are 6500 a year so I'm making a 2016 6K contribution and a 2K 2017 contribution tomorrow.
I'm singing my 13 petition tomorrow as well. Here we go.