Can I turn down an inheritance in Ch. 13?

[brandv1]

My brother passed away in April. He didn't leave much behind. But, after all is said and done, there should be be about $2500 coming to me. I'm wondering if I can opt to not take any portion and let my other brother and sister take it all rather than the trustee taking it all?

[tobee43]

i am very sorry about the loss of your brother.

federal law, does in fact, allow any beneficiary to "disclaim" a gift or inheritance. the beneficiary simply signs a written/printed disclaimer, stating that he or she disclaims the identified inheritance. the disclaimer must be made within nine months of the death of the person who had the property, in this case your brother. whatever your share was/is would most likely be distributed equally between the other/remaining beneficiaries.

[AngelinaCat]

Since you are in an active 13, you may need the trustee's permission to disclaim the inheritance. This is something you will need to discuss with your attorney.

I am so sorry for your loss.

[tobee43]

i'm not really sure about that, if one doesn't have the money yet, LOL!! it's like asking the fox to watch the hen house.

i don't know much about chapter 13's but it seems to me that would be like one is bolted by lock and chains to make such a personal decision. of course any trustee would want any money they can get their hands on, they get a percentage of it, so of course if left up to them to make such a personal decision they would make it for the OP, grab it as fast as they could. but you make a valid point there ms. cat.

if you feel so compelled to want to speak with an atty, i would speak with an estate atty first, maybe even the firm who is handling the will, as opposed to the atty that is handling the 13, as they may not be as objective. just IMHO.

[LadyInTheRed]

AC's post is the correct answer here.

It is bankruptcy law that is relevant. The OP should definitely talk to his/her BANKRUPTCY attorney before taking any action.

Yes, federal and state law allow a beneficiary to disclaim an asset. Under federal law, the disclaimer is only relevant to taxes. State law will determine, not only how soon a you must disclaim, but what happens to the inheritance if it is disclaimed if the Will or Trust doesn't already direct where a disclaimed asset goes. But, while in a Chap 13, whether to disclaim and inheritance is not a personal decision, especially when the death occurred within 6 months of the filing of the BK petition.

If the death occurred before April 23rd (6 months after the OP filed BK), then the inheritance is an asset of the bankruptcy estate. You cannot decline to accept an asset that belongs to the bankruptcy estate. If there are available exemptions that can be used, then the BK petition should be amended to list and exempt the inheritance. If there is no exemption available, then the question is whether the plan pays unsecured creditors at least the value of the non exempt portion of the inheritance. If so, the OP MIGHT be able to keep then inheritance. But, there may also be an issue of whether the inheritance should be considered income that must be turned over to the trustee. I've researched that question in the past and have not been able to find a definitive answer.

Brandv1, please let us know how this turns out.

[tobee43]

this inheritance is being discussed now, therefore, i don't like assuming anything, however, by the dates the OP posted it appears this happened over 180 days after the filing.

lady, i don't know which disclaimer you are referring to, perhaps relative to calif. law, but i have seen this done only a few occasions, there were not tax ramifications unless the estate amount rec'd is over 5 million dollars, unless their particular state defers to their individual tax rules. there were no bk's when i have seen this happen. but i can't believe a trustee would have the right to say what you must or must not do under those circumstances. (really not true, i believe at this point they can rob you any day of the week), for that matter it's like forcing it down ones throat,you may be absolutely correct, again, my only knowledge involved parties that were not in chapter 13's where a disclaimer was drawn up by the firm and signed and given to the probate court. a simply done deal.

[despritfreya]

After acquired property is property of the estate in a Chapter 13. The 180 day rule may or may not apply depending on. . .

1. Case law in OP's district;
2. Whether or not the Plan has been confirmed;
3. If confirmed, whether or not there was language in the order Confirming excluding vesting back to the debtor;
4. If confirmed and property vested back to the debtor, back to 1 above - case law in the district dealing with inheritances - how those cases interpret 11 USC 1306(a)(1).

OP needs to talk to a local bk attny on this one before doing anything, including disclaiming the inheritance.

And. . . my deepest condolences.

Des.

[tobee43]

thank you des so much for the clarification! i'm certain that will assist the OP greatly

[LadyInTheRed]

this inheritance is being discussed now, therefore, i don't like assuming anything, however, by the dates the OP posted it appears this happened over 180 days after the filing.

According to OP's signature, bk was filed on 10/23/12 and says his/her brother passed away in April. 180 days after that date is April 11, 2013 (I mistakenly used 6 months when I said April 23). So, it is possible the inheritance is within 180 days of filing.

[tobee43]

According to OP's signature, bk was filed on 10/23/12 and says his/her brother passed away in April. 180 days after that date is April 11, 2013 (I mistakenly used 6 months when I said April 23). So, it is possible the inheritance is within 180 days of filing.

yes, your correct, i not really certain lady. this is a very interesting subject matter for those in a chapter 13. with someone in a 7 it's more cut and dry. these 13's are like enigmas to me! you're knowledge of general law and the fact you are experiencing a 13 as well, i'm sure you have researched more of these situations that myself. i think as des points out there are numerous variables that may apply.

i would love to know the outcome of this situation. so please keep us posted!

[brandv1]

Unfortunately, my brother left no will. Even though he discussed with us several times that he wanted everything put in trusts for the neices and nephews. Unfortunately, without a will it comes to the siblings because he had no spouse or children. He also never updated his life insurance policy and the oldes nephew is getting all of that.

My sister is acting as executor and she says the estate lawyer is actually checking with the Trustee for us about disclaiming. Also, my BK attorney says TT will take any $, but I could file a petition to keep a portion in order to replenish the little bit of savings we had that was eaten by some car repairs and excessive Dr. bills that came up due to an eye infection that I had.

We are also about to attempt a mod due to both of us not getting nearly the overtime hours we had previously (about $500-600/month less). So, we've really been hurting lately.

[tobee43]

your sister as the trustee must distribute the funds? she can't hold them?

it's so important, and people really don't want to ever deal with their mortality, but it's so vital to have an updated will or a trust if you have property that you want to protect for your future heirs. most of us here on this site have nothing or are at zero assets, OR just beginning to restore some wealth. as a part of rebuilding one's life financially, a will or trust and a living will are all tools we all need nowadays in this society, that is, unless, one wants the state to take what little we have.

i have seen a few past my desk i like which says the trustee distributes at their own discretion, as well as things cannot be sold until the last living child is 25 year old, provisions like that to safe guard assets if any at the time of one's death. again, something we all hate thinking about, or do when it's too late.

again, brandv1 so sorry for your lost and i hope this all works out for you.

[brandv1]

Without a will, LA law is very specific. It's called Napoleonic code.
The excutor can keep 2% of the estate for a fee. Other than that it goes like this.

Married - spouse gets 100%
divorced/widowed - children split
No children - siblings split
No siblings - parents
Not sure where it goes after parents, but I know it's spelled out.

We are able to arrange for the estate to reimburse my father for the expenses of the funeral, etc. But other than that, he can't get anything directly from the estate because of the code. Now, we, the sibling can choose to give whatever we want as a gift once the succession is complete.

[tobee43]

cousins, usually a search for heirs as far as a state wants to go.

it's called dying in testate...which is a act of dying without a legal will.

[brandv1]

OK. Got some good news on this. The way it is actually working is that the estate will actually be going to my father to use until he passes then the siblings get it. The estate attny called it usufruct. So, at least, my brother's money will not be going to pay my debt and can be used, (hopefully at a much later date) when my father passes and go to my kids for college. But, because the of the paperwork that will be filed, the amount of what we'll get is spelled out.

Still getting stuff together to meet with my bk attny to hopefully modify based on lost OT for both me and my wife.