Being a beneficiary on an Irrevocable Estate Trust & filing Bankruptcy Chapter 7

Asked 2 months ago - Elmhurst, NY

Should I give up being a beneficiary before filing bankruptcy chapter 7? What do I need to know & what to expect from the creditors?

Attorney answers (3)

  1. Dorothy G Bunce

    Pro

    Contributor Level 20
    Best Answer
    chosen by asker

    Answered . You can do whatever you want, but appreciate that you may be violating the terms of the Uniform Fraudulent Transfers Act, a criminal law, if you give up property rights in order to avoid paying creditors. Filing bankruptcy puts you in the spotlight for an investigation of your financial transactions, so I would be consulting with a bankruptcy attorney that can assist your in planning for bankruptcy & who understands asset protection requirements. Hope this perspective helps!

  2. Timothy W Holt

    Contributor Level 11

    Answered . You will have to disclose your beneficiary status in your bankruptcy. There are timelines that come into play as well as the language of the trust itself. You may be making a big mistake if you don't check with your bankruptcy counsel before doing anything like this. If you don't have an attorney you can easily find one in your area on Avvo.
    Good Luck

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  3. Shelley Ann Elder

    Pro

    Contributor Level 19

    Answered . I agree with Mr. Holt. You would still need to disclose and see if this is something the trustee will overlook or want to delve into. The factors around your interest in the trust will control.

    Mark here if this answer is helpful

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