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A.J.
A.J., Attorney
Category: Bankruptcy Law
Satisfied Customers: 4268
Experience:  Experienced consumer bankruptcy attorney.
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I hve a remaider interest in my Mothers life estate, who is

Customer Question

I hve a remaider interest in my Mother's life estate, who is living. This is a house in Alabama. I declared bankruptcy and the Trustee has auctioned off my interest in the estate. The trustee is not happy with the amount he got at auction. Is there anyway we can get the Trustee to accept the bid and get the court to approve the sale?

I think the Trustee might try to force a sale of the house. Since my Mother is living, will she get a portion of the sale?
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  A.J. replied 1 year ago.

SavyLawyer :

Hello, and thank you for contacting Just Answer. My name isXXXXX am a bankruptcy law professional, and I look forward to answering your question this afternoon.

SavyLawyer :

Generally, the trustee may only force sale of an asset that is currently held. So, for example, you have a right to the remainder (Which usually means after the current holder of the life estate has died), which is what the trustee can auction off. If you do not have any current interest in the home, but only the future interest, then the trustee would not have legal authority to seize and sell the current interest. If, however, what you hold is more than just a future interest in the home, but have a current interest to some portion of the home, then yes, the trustee could try and force a sale, and all holders of an interest in the home would have to be compensated from the sale, including the current owner of the property.

SavyLawyer :

So, if I am understanding what you are saying correctly, the holder of a future interest filing for bankruptcy should not effect the holder of a current interest in property's right to hold that property until their death (That is what a life estate is, the right to hold and use the property for that person's life). However, if the interest that you have is not just a future right (which is what a remainder usually is, just a future interest), then the trustee could get at the property. The basic rule is anything that you currently have a right to is what the trustee can take and sell. If you currently have a right only to a future interest, then that is what the trustee can sell. If you currently have a right to an immediate interest in property, then the trustee could sell the property itself (or whatever your interest in the property is).

Customer:

I only hold the future interest. The Trustee forced the auction of my interest, but doesn't like the amount he got. Does he have to accept the bid?

SavyLawyer :

That would depend on the terms of the auction, if the auction called for binding bids, then the trustee would have to accept a bid. However, if the auction was just a solicitation of offers, then no, the trustee would not have to accept a bid, and could try to sell your future interest in the home on the open market. While that means that the house would be "sold" for future use, your bankruptcy should not effect the life estate holder's right to the property while they are still alive. Again, the only thing that a trustee can seize and sell is what you actually have a right to. If your interest is a future interest, than that is what they can sell.

SavyLawyer :

I hope that makes sense, but let me know if you need further clarification. Given the complicated nature of estates in relation to a bankruptcy, I would strongly suggest seeking the assistance of a bankruptcy attorney in dealing with the trustee if at all possible. The Alabama State Bar Association has a referral service at:

SavyLawyer :

http://www.alabar.org/lrs/

SavyLawyer :

In any event, let me know if you need further clarification (certainly do not be afraid to ask for clarification!). Otherwise, please remember to RATE my answer positively so that I can receive credit for my work.

A.J., Attorney
Category: Bankruptcy Law
Satisfied Customers: 4268
Experience: Experienced consumer bankruptcy attorney.
A.J. and other Bankruptcy Law Specialists are ready to help you

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