Trust Inheritance While In Chapter 13

[BKINAZ]

It is possible (though I REALLY hope they live forever, great people) that my wife may inherit her parents house and money through their trust. What does that mean as it relates to our Chapter 13 if it happens within the next 5 years?

Is it possible for us to have her parents amend the trust so that she would be able to inherit upon her birthday 6 years from now, or later should it be a relevant issue?

[optimistic1]

Those would then be your assets. Upon which they would be under the microscope under the Trustee, and thus, if you own another home outright and alot of extra money, and it exceeds the state allowances, they sell it to pay off your debt.

If you somehow amended the trust to get around the BK, you would be committing fraud, and if the Trustee found out somehow, you would end up in the slammer most likely.

Your thinking WORST CASE SCENARIO, dont be like me, thats why I used the optimistic1 instead of freakoutguy

Let some others chime in too, they might have better ideas, and i might be wrong.

[BKINAZ]

Your thinking WORST CASE SCENARIO, dont be like me, thats why I used the optimistic1 instead of freakoutguy.

That's what you get when you are at the beginning stages of this stuff...vs experience. Tat's why you guys are here to talk us down off the ledge.

[optimistic1]

No doubt, well I am in the same boat as you, and I definitely know how that is. Im trying to be calm cool and collected, but at the same time, my fingernails are almost 100% chewed off, disgusting yes, funny yes.

[Flamingo]

Depends on the wording of the trust....usually both your wife's parents would have to pass away during the time of your Chapter 13 (that is probably what will have to occur for the trust to take effect because if one spouse passes, the other usually gets the estate). The odds of both your wife's parents passing during that time are probably astronomical unless they have health issues. If, in fact, both pass or however the trust is worded, and your wife comes into an inheritance between the time you file your Chapter 13 until the day of discharge, your trustee would have a high interest in that inheritance and if there is an inheritance, it has to be reported to your attorney. You have to weigh the odds of that occuring during your Chapter 13 because, if you think about it, most folks are beneficiaries in their parents' wills while they are in a Chapter 13 and you just have to weigh the odds. Many have their parents take them out of the wills several months prior to filing just in case something happens.

You can get paranoid like mad when you file a Chapter 13. Lord knows I myself had many sleepless nights worrying about unnecessary things. Unless your wife's parents are in very ill health I would say you don't have too much to worry about.

[myid4u2c]

I will have to disagree on the fraud issue if the trust is changed. While it does at first glance appear to be fraud you can not control what other people do with their money. This would be a question for an attorney and I would love to know the real answer and it could vary from one attorney to an other.

Bottom line this is not your asset and if some else decides to change their intentions it would be very hard to prove fraud.

[woeisme]

If you somehow amended the trust to get around the BK, you would be committing fraud, and if the Trustee found out somehow, you would end up in the slammer most likely.

I don't think this statement is true. The parents have NO OBLIGATION WHATSOEVER to leave their assets, in a trust or otherwise, to their daughter. So they can change the wording of their trust, whenever they want, for whatever reason they want, after all, it's their money, not the daughters or the trustees. It only becomes the daughter's (and then possibly, the creditors via the trustee) after the parents pass, and then only under the conditions that they set forth. So I don't see any problem with them changing the conditions of their trust, their money, their choice.

I am similarly concerned about this, as my Mother is in her mid-70's, and in ill health. I've asked her to take me out of her will completely, as it is currently set up to split everything equally with my 5 siblings and me. (Not that it'd be that much, maybe 50-100K total split 6 ways.) But even though I've asked her to change her will, she won't do it. Actually one of my sisters and I both asked her to change the will long before the CH 13 because we each wanted her to leave our portions to one of my brothers who is disabled and unable to work; I figure if she wouldn't change it for him, she wouldn't change it for the CH 13.

[MJJ3767]

This is interesting because my attorney as well as the trustee asked if I intended to inherit anything in the next 6 months. They were only concerned about the 6 month period following my 341 meeting.

[optimistic1]

Yes they do ask about you inheriting anything. So, if you are under the plan, and you choose to be removed from a will, I suppose it is your choice, and your parents choice to do so. So, most likely it might not be fraud, keyword might. Ask an attorney.