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Ask Terry L. Your Own Question
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2877
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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Hello,Florida- My father in laws revocable trust.My sister-in-la

This answer was rated:

Hello,
Florida- My father in law's revocable trust.
My sister-in-law was a beneficiary at 50% along with her brother 50%.
She has been in the trust since March 15, 2001. On November 20, 2012 she had her father remove her from the trust and added her two adult children at 1/4 apiece. Then she files for Chapter 7 on August 26, 2013. The father passes away on September 3, 2013 at the age of 94. When filing Chapter 7, ScheduleB-Personal Property, they asked if Contingent or noncontigent interest in estate of a decedent death benefit plan, life insurance policy, or trust. She indicated none.

Terry L. :

Hi, thanks for your question. You should hire a lawyer for specific legal advice. No attorney client relationship is created here.

Terry L. :

Since the trust was put into her kid's names, that asset is her kids, not hers, so wouldn't be on the schedules.

Terry L. :

If there is any other asset she is inheriting, then that must be disclosed to the trustee for 6 months after the bankruptcy.

Terry L. :

She can file an amended schedule A/B and send it to the trustee as well.

Terry L. :

Let me know if there are any other questions.

Terry L. :

Thanks

Terry L. :

Terry

Customer:

Hello Terry,

Terry L. :

yes

Customer:

Doesn't the bankruptcy law state that an individual must list all financial accounts and instruments held in the name of the debtor or for the debtor which were closed, sold, or otherwise transfered within 1 year immediately preceeding the commencement of this case. Like I stated, it was only 8 months when her name was removed and replaced with her kid when she file for Chapter 7.

Terry L. :

Closed accounts and taking name off as a beneficiary are 2 different things.

Terry L. :

Beneficiary interests are not really an asset, until it vests

Terry L. :

so changing it prior to bankruptcy has no effect

Terry L. :

so, i would not list that down, since it wasn't a 'transfer' or 'liquidation' of an asset

Terry L. :

Now, there would be no harm in listing it either, but it would have no effect on the bankruptcy either way

Terry L. :

Any further questions?

Customer:

Well it indicates to me that this person is hiding their asset (inheritence) to avoid paying back creditors.

Terry L. :

If she didn't inherit anything, then it's not an asset

Terry L. :

if she does, she has a duty to report it to the trustee

Terry L. :

if her kids inherit, that is not her asset either

Terry L. :

since it was a revokable trust, that person can change their mind and reallocate however they want

Customer:

Ok thanks for your time and have a great day.

Terry L. :

sure. if you have any other questions, let me know

Terry L. :

please click accept to rate my answer

Terry L. :

thank you and good luck!

Customer:

Ok

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