Inheritance of trust

[2sad4this]

I had consulted with an attorney with the issue of inheritance of Mothers trust. Since I received that almost 8 years ago he said I need to list that, even though the monies were spent. I didn't think to ask this question, as it was a while ago. When I describe the property would putting down just personal property and the value of that, adding that it has been spent, sufficient? I basically have no record of what it was spent on other than large purchases, which I will document. Thank you for your help.

2sad

[tobee43]

well i'm not really understanding why a trust from 8 years ago is such an issue unless it was substantial enough that would catch the court eye..in which case your atty is only attempting to protect you....however, i'm someone confused as to the significance of something that old whether it was a trust or not...it's almost the same as asking you to prove what you did with your 25k bonus 8 years ago.

now, i do know you must list an inheritance you are anticipating within 180 days of the filing....but that doesn't appear to be the question here...

anyone else know why a 8 year old inherited trust would be an issue today??

[Pandora]

your attorney is requiring you list your inheritance from 8 years ago? Is there a reason he/she is going above and beyond the normal 2 years?

[2sad4this]

The question that I asked about was " List all other property transferred by the debtor within 10 years immediately preceding the commencement of this case to a self-settled trust or similar device of which the debtor is a beneficiary." The trust totaled around $200,000. The lawyer did not ask the amount.

[tobee43]

The question that I asked about was " List all other property transferred by the debtor within 10 years immediately preceding the commencement of this case to a self-settled trust or similar device of which the debtor is a beneficiary." The trust totaled around $200,000. The lawyer did not ask the amount.

personally i think it's a non issue....however, now seeing the question i understand why your atty wants the answer...which is simple...it was spent 8 years ago on living and other expenses i have no receipts because i had no clue i needed them 8 years down the road...i'm hoping that one of the attys that frequent the site will take a look and have a more concrete answer for you.

[tcreegan]

Hi 2sad4this,

Did you buy a house? MN has a nice $300,000 homestead exemption....

Actually might not have been a good idea.... http://www.debt-consolidation-credit...d.php?t=275732
1. The entire value of homestead property will not be protected where its value has been increased by a disposition of non-exempt property made by the debtor during the 10 years prior to filing bankruptcy with the intent of hindering, delaying, or defrauding creditors

My feeble understanding is that the 10 yr lookback is only for the homestead exemption. (any of the $$ you put on the mortgage principle) AND you have to had bad intent. That will turn out to be the essence of the question, did you deliberately put any inheritance $$ on the mortgage principle to deliberately hide the money from creditors.

Hope this helps somehow,

Tom in Colo

[debee]

That question doesn't pertain to trusts you inherit, it refers to trusts that you set up yourself naming yourself as beneficiary. They used to be safe harbors for assets. That changed in 2005 with the new bankruptcy law. I don't get why your attorney is even asking about it.

[tobee43]

Hi 2sad4this,

Did you buy a house? MN has a nice $300,000 homestead exemption....

Actually might not have been a good idea.... http://www.debt-consolidation-credit...d.php?t=275732
1. The entire value of homestead property will not be protected where its value has been increased by a disposition of non-exempt property made by the debtor during the 10 years prior to filing bankruptcy with the intent of hindering, delaying, or defrauding creditors

My feeble understanding is that the 10 yr lookback is only for the homestead exemption. (any of the $$ you put on the mortgage principle) AND you have to had bad intent. That will turn out to be the essence of the question, did you deliberately put any inheritance $$ on the mortgage principle to deliberately hide the money from creditors.

Hope this helps somehow,

Tom in Colo

tom...i can understand the self-settled trust issue...however not the the "or similar device of which the debtor is a beneficiary".

it's the time line that sounds so off to me, however, i have never seen a mn petition?? i believe, if i recall correctly on our petition, or better stated, in this state, the longest time line for any question was 5 years...and i do believe that was only 1 question in total. most time lines were within 2 years of the filing of the petition etc.

even if OP at some time 8 years ago, did, in fact, deliberately take any inherited monies and apply it onto a mortgage principle, how could one prove intent of fraud...what...???OP was planning this bankruptcy 8 years ago so in an effort to protect her/his inheritance he or she willfully and knowingly placed monies on the mortgage to deceive the courts today????...nope...i'm not buying that one.

2sad...is this question off the petition itself...or is this just a question your atty is asking you??

The question that I asked about was " List all other property transferred by the debtor within 10 years immediately preceding the commencement of this case to a self-settled trust or similar device of which the debtor is a beneficiary."

[tcreegan]

how could one prove intent of fraud...what...???OP was planning this bankruptcy 8 years ago so in an effort to protect her/his inheritance he or she willfully and knowingly placed monies on the mortgage to deceive the courts today????...nope...i'm not buying that one.

Thats what I was thinking tobee....pretty farfetched...I'm not buying it either...

Everything on my petition was 2yrs or less...

[tobee43]

agree tom...i am awaiting op's reply with respect to whether this question was posed on the state petition itself, or the firms general questionnaire... which many be the way the firm sets up fees???? interesting.

[2sad4this]

Hi,
I'm sorry that I didn't get back here sooner. Life is crazy right now, but I'm sure you all know what I mean. Anyway, The question I posed to you was part of #10 any and all other transfers, part B. It also asks for the "trust or other device" "date transferred" and "describe property transferred and value received". Since the last time I was here I downloaded Nolo's "How To File For Chapter 7 Bankruptcy". This is what was written for that question on the bankruptcy filing forms.

b. List all transfers of your own property you have made in the previous ten years to an irrevocable trust that lists you as a beneficiary. These types of trusts—referred to as self-settled trusts—are commonly used by wealthy people to shield their assets from creditors and by disabled people to preserve their right to receive government benefits. In bankruptcy, however, assets placed in a self-settled trust will be considered nonexempt. There is an exception that applies to assets placed in certain special needs trusts. (In re Schultz, 368 B.R. 832 (D. Minn. 2007).) If you are the beneficiary of a self-settled trust, you should talk to a bankruptcy attorney before filing.

This better explains I think that I would have had to create and transfer my own property to a self-settled trust, which I haven't done. I inherited from my mothers trust her property, not my own property. So I believe that this is a non-issue for me as tobee says. Thanks for all your help! I am truly blessed to have found all of you, and that through here I noticed many references to Nolo's book.

2sad