Can Your Inheritance Be Garnished for Restitution?

Yes, your inheritance can be garnished for restitution. A federal criminal restitution order creates an automatic lien on everything you own or later acquire, and an inheritance falls squarely within that reach.¹ If you are incarcerated when the inheritance comes in, federal law goes a step further and requires you to apply its value to your outstanding balance.²

Why the Restitution Lien Reaches an Inheritance

The controlling statute is 18 U.S.C. § 3613. It lets the government enforce a restitution order against “all property or rights to property” belonging to the defendant. That language is deliberately broad. It covers property you owned at sentencing and property you acquire afterward, which is why an inheritance is not a safe harbor.¹

The same statute creates an automatic lien in favor of the United States the moment the restitution judgment is entered. It functions like a federal tax lien: a security interest attaching to everything you own or later acquire. The Department of Justice states it plainly, telling victims that “the Court’s restitution order on your behalf also acts as a lien in favor of the United States against all property owned by the defendant.”³

One phrase in the statute matters more than any other for people trying to shield assets: the enforcement power applies “notwithstanding any other Federal law.” That clause overrides most protections that would normally keep property out of a creditor’s hands, and it also displaces state exemption laws that ordinarily shield certain assets from collection.¹ The Mandatory Victims Restitution Act, which requires courts to order restitution for victims of certain federal crimes, is what puts most defendants inside this framework in the first place.⁴

What Happens If You Inherit While in Prison

Federal law is direct about this situation. Under 18 U.S.C. § 3664(n), if you receive “substantial resources from any source, including inheritance, settlement, or other judgment” while incarcerated, you must apply that value to any restitution you still owe. The statute makes the obligation automatic; there is no separate hearing required to trigger it.²

A companion provision, § 3664(k), requires your restitution order to include a term obligating you to notify the court and the Attorney General of any material change in your financial situation that could affect your ability to pay. A significant inheritance clearly qualifies. Once that notice arrives, the court can adjust your payment schedule or demand payment in full.²

The practical effect is straightforward: if you are in federal prison and a relative dies leaving you money or property, the government expects that inheritance to satisfy your restitution before it reaches your hands.

How the Government Finds Out and Collects

You do not have to self-report for this to happen. When someone dies, their estate typically passes through probate, a public court process. Filings in probate are open records, so the Financial Litigation Unit at the U.S. Attorney’s Office, or a victim’s attorney, can check whether a debtor is named in a will or entitled to a share of an estate.

Once your interest in the estate surfaces, the creditor can collect directly from the probate case. The usual step is filing a claim or garnishment order with the court overseeing the estate, which directs the executor to send your share toward the restitution debt rather than to you. The U.S. Attorney’s Office files liens specifically to facilitate this kind of collection.⁵ You receive only whatever remains after the balance is satisfied, if anything remains at all.

The Usual Protections Do Not Hold Up

Inherited Retirement Accounts

You might expect that inheriting a 401(k) or IRA offers some cover, since ERISA normally shields retirement funds from creditors. For criminal restitution, that shield largely falls away. In United States v. Frank, the Fourth Circuit held that “ERISA does not bar the seizure of retirement funds pursuant to a restitution order under the MVRA,” pointing to the “notwithstanding any other Federal law” language in § 3613(a) as the reason.¹

There is a limit. When the government garnishes a retirement account, it “stands in the shoes of the defendant himself” and can only access funds the account holder has a present right to withdraw. Plan restrictions and early-withdrawal rules bind the government the same way they bind you, so the account may not be drained overnight. It can, however, be reached to the extent you are entitled to withdraw.

Spendthrift Trusts

A spendthrift trust is sometimes set up by a parent or other relative who suspects the heir has financial trouble. The trust holds the assets and pays them out over time, with a clause meant to keep creditors from reaching the funds while they sit inside. Against many creditors, it works. Against criminal restitution, it often does not.

Many states have carved out explicit exceptions letting creditors reach spendthrift trust assets when the underlying debt is restitution owed to crime victims, on the public policy view that a person should not enjoy inherited wealth while victims remain uncompensated. At the federal level, because restitution orders can be enforced against “all property or rights to property” of the defendant, courts can treat a beneficiary’s interest in a spendthrift trust as reachable property.¹ A trust set up specifically to funnel an inheritance to someone with an outstanding restitution order is an unreliable shield.

Disclaiming the Inheritance

An heir can legally disclaim an inheritance, refusing to accept it. A valid disclaimer causes the law to treat you as if you predeceased the person who left you the assets, and the property passes to the next person in line.

Courts are skeptical when someone with a large outstanding judgment declines a windfall. The doctrine at work is fraudulent transfer, sometimes called a voidable transaction. A court can examine whether the real purpose of the disclaimer was to put assets beyond a creditor’s reach. If you owe $200,000 in restitution and disclaim a $150,000 inheritance that would then pass to your children, the court is likely to see through that arrangement. When a disclaimer is found to be a fraudulent transfer, the court can void it, treat the inheritance as accepted, and let the creditor proceed with collection.

How Long You Remain Exposed

Federal restitution does not go away quickly. The lien lasts for 20 years from the date the judgment is entered, or until the debt is paid in full.⁶ If you serve prison time, the clock stretches: liability terminates on the later of 20 years from the judgment or 20 years after your release.⁷ Someone sentenced at 30 who serves 10 years can be pursued until at least age 60. An inheritance received at any point in that window is reachable.

State Restitution Orders

Most of the enforcement machinery described above is federal, but state criminal restitution works on similar principles. Nearly every state treats a criminal restitution order as equivalent to a civil judgment for collection purposes, so the victim or the state can use standard tools such as wage garnishment, bank levies, and property liens to reach assets, including inherited property.

The specifics vary. Some states explicitly authorize garnishment of a beneficiary’s share of a probate estate. Others rely on the general enforcement powers that follow any civil judgment. A few states have carved out limited exemptions or caps, but those exemptions rarely cover inheritances, which are treated as windfall rather than essential property. Enforcement periods vary as well, and many states allow restitution judgments to remain enforceable for decades or to be renewed.

The result is the same whether the order came from a federal or state court. An inheritance is one of the easiest assets for a restitution creditor to find, because probate is public, and one of the hardest to protect, because the usual shields do not hold.

1
Office of the Law Revision Counsel. 18 USC 3613 – Civil Remedies for Satisfaction of an Unpaid Fine
2
Office of the Law Revision Counsel. 18 USC 3664 – Procedure for Issuance and Enforcement of Order of Restitution
3
Department of Justice. Restitution Process
4
Office of the Law Revision Counsel. 18 USC 3663A – Mandatory Restitution to Victims of Certain Crimes
5
U.S. Department of Justice. The Restitution Process for Victims of Federal Crimes
6
Office of the Law Revision Counsel. 18 USC 3613 – Civil Remedies for Satisfaction of an Unpaid Fine
7
GovInfo. 18 USC 3613 – Civil Remedies for Satisfaction of an Unpaid Fine