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A.J.
A.J., Attorney
Category: Bankruptcy Law
Satisfied Customers: 4296
Experience:  Experienced consumer bankruptcy attorney.
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I am preparing a chapter 7 petition for an elderly couple.

Customer Question

I am preparing a chapter 7 petition for an elderly couple. They are beneficiaries to a trust. They do not get income from the trust, but it has a lot of assets they have access to, for example their cars are in the trust name. Do I list the trust on the petition or is it an entity I don't list?
Submitted: 2 years ago.
Category: Bankruptcy Law
Expert:  A.J. replied 2 years ago.

SavyLawyer :

Hello, and thank you for contacting Just Answer.

SavyLawyer :

What type of trust is it? Is it a living trust (ie the beneficiaries and the trustees are the same)?

Customer:

Yes it is a living trust and the beneficiaries and trustees are the same

SavyLawyer :

Then generally yes, the trust and it's assets must be listed as property of the debtor in the bankruptcy petition. A living trust provides zero protection in bankruptcy or from creditors, it is simply a tool used to avoid probate.

SavyLawyer :

Assets in a living trust are generally not exempt from the bankruptcy court's purview. While there may be exemptions that apply to the property, a living trust is generally not a protection in bankruptcy.

SavyLawyer :

I hope this helps, and let me know if you have any further questions. Otherwise, please remember to RATE my answer AT LEAST 3 out of 5 so that I can receive credit for my work.

Customer:

I so have one more question, When I list the Trust, do I list everything in it and value each item ? They have cars, barns, trailers, race horses(winning) and RV. At least I could get some exemption if I did. I guess this will be a Chapter 13 instead!!

SavyLawyer :

That is a difficult question, but yes, I believe the assets in the trust should be listed. As the attorney of record that is ultimately going to be your decision (make sure to consult the bankruptcy code and Bankruptcy regs!) but yes, generally assets that a debtor has a legal right to should be listed in the bankruptcy petition.

SavyLawyer :

I hope this helps further, and let me know if you require further information. Otherwise, please remember to RATE my answer AT LEAST 3 out of 5 so that I can receive credit for my work.

Customer:

I work for a bankrptcy attorney, he is on the golf course and I have a deadline of tomorrow to avoid a foreclosure action. Thank you for your immediate response. I want to kill my boss right now!!! Your the best

SavyLawyer :

That would be immensely frustrating. Good luck to you! And please do remember to RATE my answer AT LEAST 3 out of 5 so that I can receive credit for my work.

A.J., Attorney
Category: Bankruptcy Law
Satisfied Customers: 4296
Experience: Experienced consumer bankruptcy attorney.
A.J. and 2 other Bankruptcy Law Specialists are ready to help you

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