My deceased friend "R" set up a Living Trust with several rental properties in it, and after R's death, the trust was supposed to pay back medicare for R's medical expenses to the tune of $240k . My friend "J" is the trustee. After R's death, her son rented all of the houses to his friends, became violent with the trustee J, and took all the rent in cash. J stayed away for fear of the son, but now all of the houses are in foreclosure (except one that is free & clear) and in really bad condition, and Medicare is coming after J for re-payment. There is no where near $240k in equity. If all the houses were liquidated, there would only be about $50k in equity. Can J bankrupt the trust?
I suggest contacting an attorney for individualized assistance. Generally, the trustee must confirm with the terms of the trust document. I suggest reviewing the trust document.
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