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Debtor is Trustee/Beneficiary of Revocable Trust - filing chapter 7
First Scenario, if the trust is revocable, no. Although it would be prudent to review the trust bank account to see who was getting paid; and what they are getting paid for.
When mom dies the trust estate vests in the beneficiary[ies], distribution can be held up for many reasons, but the date of vesting is the date of death. If there is a spendthrift clause a disinterested trustee could protect the trust assets from the beneficiarys creditor[s]; but the debtor/beneficiary cant be the trustee of spendthrift trust in his favor. Also upon death of the settlor the successor trustee has an obligation to seek out and pay creditors; or challenge the creditor claim.
Best regards
Larry Webb
California Board of Legal Specialization
Certified Specialist in Bankruptcy Law
P 805.987.1400
F 805.987.2866
C 805.750.2150
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Mother is Settlor/Trustee of revocable trust. Debtor is
Trustee/Beneficiary of Trust. Debtor manages the funds in the trust and
pays Mother's bills from the Trust.
If Debtor files Chapter 7, can trustee access the funds? The funds do not
belong to debtor.
First scenario: Assume Mother does not die during the Chapter 7 case.
Second scenario: Mother owes creditors above the funds that are in the
Trust. If she dies during Debtor's chapter 7, will the funds go to pay her
own creditors before any distribution to Debtor as beneficiary of the Trust?
Holly Roark
Certified Bankruptcy Specialist*
*and Sports Lawyer*
holly@roarklawoffices.com **primary email address**
www.roarklawoffices.com
*Central District of California & District of Idaho* - Consumer Bankruptcy
Attorney
1875 Century Park East, Suite 600 Los Angeles, CA 90067
T (310) 553-2600; F (310) 553-2601
*By State Bar of California Board of Legal Specialization
Mother is Settlor/Trustee of revocable trust. Debtor is Trustee/Beneficiary of Trust. Debtor manages the funds in the trust and pays Mother's bills from the Trust.If Debtor files Chapter 7, can trustee access the funds? The funds do not belong to debtor.First scenario: Assume Mother does not die during the Chapter 7 case.Second scenario: Mother owes creditors above the funds that are in the Trust. If she dies during Debtor's chapter 7, will the funds go to pay her own creditors before any distribution to Debtor as beneficiary of the Trust?Holly RoarkCertified Bankruptcy Specialist*and Sports Lawyer
holly@roarklawoffices.com**primary email address**
www.roarklawoffices.com
Central District of California & District of Idaho - Consumer Bankruptcy Attorney
1875 Century Park East, Suite 600 Los Angeles, CA 90067T (310) 553-2600; F (310) 553-2601
The post was migrated from Yahoo.