Selling remainder interest in life estate.

[jtkz]

Can I sell my remainderman interest ( 33%) in a life estate and not run into any Trustee issues if I file BK in the future? does anyone know how long the look back period would be?

[HHM]

It depends....

First, it depends on how much you sell it for; if you receive a reasonable market value for your interest and the transaction is otherwise legitimate (i.e. money changes hands, deed is exchanged etc), then it doesn't matter what the look-back is because it was a arms length transaction, there is no problem.

However, if you are looking to sell this interest to a family member for $1, that is bankruptcy fraud, and they could possibly go back 10 years (on real estate transactions), but the standard BK look back is 2 years, but your state law may be longer, most are 4 years.

[jtkz]

Value would be tough to determin in this market, Does 1/3 of the fair market value for county income taxes sound reasonable? I have read a few more posts since i posted this thread, If the fair market value is lets say $175,000 multiplyied by my remainderman intrest, works out to be $ 40,000. If i sold my interest to my brother for 40 K with real money changing hands and used the money to pay the capital gains taxes and past due federal income taxes. I think i would be OK. But the brother i was thinking of selling it to, I owe 20k. so if i used the money to pay him back that would make him a preferred creditor. So the lookback would be 2 years?