Can I keep part of an inheritance?

[sore1ste]

I am in Chapter 13. My brother just died intestate, so my sister and I each stand to inherit half his estate. The estate is about $100,000. Are there any legal ways that I can prevent all of my inheritance from being taken by the Trustee? The amount that I would inherit is not enough to pay of all our debts, but should be enough to pay off the amount we would end up paying after 5 years on Chapter 13.

[justbroke]

I am sorry to learn about your loss of a sibling.

To answer your question, no. You may be able to exempt some of the money based on your State's exemptions. You should work with your attorney on the best solution, which may include a voluntary dismissal and settlements with your creditors. You'll have to weigh all the options, factors, chances of settlement.

[espo1357]

I am in Chapter 13. My brother just died intestate, so my sister and I each stand to inherit half his estate. The estate is about $100,000. Are there any legal ways that I can prevent all of my inheritance from being taken by the Trustee? The amount that I would inherit is not enough to pay of all our debts, but should be enough to pay off the amount we would end up paying after 5 years on Chapter 13.

From a sharp lawyer: "keep your mouth shut", "we can put it in escrow".

take what you want from those statements, but if it is out of state inheritance, those apply according to my source.

in state, maybe its a different story.

My guess is that it is very unlikely they will come after you, but you never know, and it is better to be safe in any bankruptcy case...

then again, I like the idea of being street smart too.

Good luck.

[Flamingo]

Since you are in active 13 when receiving the inheritance, if you do not report the inheritance to your attorney, you risk dismissal of your chapter 13. Deaths are public information and your brother's death, in any state, is easily searchable by anyone. The estate will need to be probated and all your informatoin and your sibling's information will be needed by the Register of Wills in the state/county in which he passed. To hide it is fraud as you are required to report inheritances during your Chapter 13. We did and it was difficult to do also...the trustee took about half of my husband's inheritance from my FIL after all estate bills were paid, his house sold, etc. The funds were distributed to our creditors over and above the confirmed prrcentage amount of our plan. But we got to keep half...if we didn't report it we could have been up the creek without a paddle...

[justbroke]

I don't like the idea of hiding anything in Bankruptcy. The repercussions are serious, like a dismissal with prejudice barring you from ever discharging any debt prior to the filing date. If you don't want the Trustee to have access to your inheritance, then you should consider a voluntary dismissal. Otherwise, "hiding" it (which saying nothing really is), could get you into more trouble than it's worth. The fact that it came from a source outside your state is totally irrelevant.

For inheritances, escrow means absolutely nothing. IN the part of the Bankruptcy code concerning inheritances, it becomes property of the estate as soon as you become entitled to receive it. Not when you actually receive it. So escrow means nothing. 11 USC 541

[espo1357]

And another option would be to just let the case get dismissed, and lose protection, correct?

My source was very strong, btw.

However, the right play is to tell the truth just like our leaders in Washington.

[justbroke]

And another option would be to just let the case get dismissed, and lose protection, correct?

That's what I wrote in my first response. Sometimes, you just give up the bankruptcy.

I have serious issues with someone who chose Chapter 13, keeps a large inheritance, and is allowed to get a discharge in a Chapter 13 without forfeiting all or part of a pre-discharge inheritance -- not subject to exemptions -- by hiding it from the Trustee and creditors. Any attorney that would "advise" otherwise, is probably

The whole purpose of a Chapter 13 is to allow you to reasonably reorganize your debt. Not to hide, hinder, delay or defraud creditors further.

I know it was just an attorney that you know, but that is seriously bad advice. This isn't a 5th amendment issue at all.

[sore1ste]

Follow up question for Flamingo

Since you are in active 13 when receiving the inheritance, if you do not report the inheritance to your attorney, you risk dismissal of your chapter 13. Deaths are public information and your brother's death, in any state, is easily searchable by anyone. The estate will need to be probated and all your informatoin and your sibling's information will be needed by the Register of Wills in the state/county in which he passed. To hide it is fraud as you are required to report inheritances during your Chapter 13. We did and it was difficult to do also...the trustee took about half of my husband's inheritance from my FIL after all estate bills were paid, his house sold, etc. The funds were distributed to our creditors over and above the confirmed prrcentage amount of our plan. But we got to keep half...if we didn't report it we could have been up the creek without a paddle...

Did you have to do anything to get half of your husband's inheritance? For example, making a formal request to the trustee to be allowed to keep some of the inheritance.