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Update on Living Trust a Fraudulent Transfer?
Thank you for the information. Excellent!
I think wes is pushing the evenlop over the edges.
Joseph Ore
Debtesq@aol.com
Thank you for the information. Excellent!
I think wes is pushing the evenlop over the edges.
Joseph Ore
Debtesq@aol.com
The post was migrated from Yahoo.
If the debtor's home was held in her revocable trust, the property
remained hers in all but record title. (Although title is probably
reflected in her name as trustee of the trust)
A revocable trust is not a separate entity from its settlor for tax
purposes. Neither does it protect assets from a settlor's
creditors. If the property was conveyed to the trustee of the
debtor's revocable trust, and the debtor as settlor retains the
power to revoke the trust in whole or part, the trust property is
subject to the claims of creditors of the settlor to the extent of
the power of revocation during the lifetime of the settlor.
California Probate Code 18200. Furthermore pursuant to California
Probate Code 18201 provides the settlor's assets held in the
revocable trust are entitled to all the same exemptions commencing
with CCP 703.010 to which she would be entitled if the property was
not held in trust.
The Chapter 7 trustee's position claiming fraudulent conveyance
results from conveying property to a revocable trust is more than
aggressively pushing the envelope, it is egregiously abusive. The
debtor is clearly entitled to her homestead exemption in this
property. This appears like Rule 9011 material to me.
If the trustee's position were to prevail it would result in
horrible social policy implications. Aside from the obvious
negative impact on debtors, the net result would be antithetical to
creditor's interests generally for those debtors not in bankruptcy.
Use of living trusts would decline and result in more probate
cases. Avoiding probate through use of a living trust
significantly decreases the costs and speed of administration of a
decedent's estate. In my probate practice I see insolvent probate
and trust estates with assets sufficient to merit administration.
In my experience the executor and attorney's statutory and
extraordinary fees, not to mention costs, take a much bigger chunk
of the estate assets in a probate case than in a trust estate.
Mark Jessee
wrote:
>
>
> Chapter 7 Trustee's broker states that the FMV of debtor's home is
> $315K. She'll sell it at 6% commission, cost of sale is $18,900.
> Debtor provided trustee with copy of reverse mortgage statement
> showing $175K owed on home, and debtor took $125K homestead
instead
> of $150K exemption she is entitled to. Even using the $125K
> homestead exemption, there is negative equity cushion of $3900.
>
> Debtor told Wes Avery that the reason she had the living trust
done,
> (through a lawyer affilliated with AARP), was because when her
> husband died 4 years ago, her 4 children had some squabbles over
who
> got what from his estate. She made the trust so that her four
> children could clearly see how her estate was to be divided.
>
> Knowing this, Wes still filed the fraudulent transfer adversary
> against her alleging that the transfer was made to defraud her
> creditors, and asking the court to rule that she was not entitled
to
> her homestead exemption.
>
> I'm trying to get the go ahead from LA Public Counsel to take this
> case. I'll need LOTS OF HELP! Case number is LA04-29388-SB,
> Consuelo Torres.
>
> Thanks!!!!
> Ty Takeuchi
The post was migrated from Yahoo.
Chapter 7 Trustee's broker states that the FMV of debtor's home is
$315K. She'll sell it at 6% commission, cost of sale is $18,900.
Debtor provided trustee with copy of reverse mortgage statement
showing $175K owed on home, and debtor took $125K homestead instead
of $150K exemption she is entitled to. Even using the $125K
homestead exemption, there is negative equity cushion of $3900.
Debtor told Wes Avery that the reason she had the living trust done,
(through a lawyer affilliated with AARP), was because when her
husband died 4 years ago, her 4 children had some squabbles over who
got what from his estate. She made the trust so that her four
children could clearly see how her estate was to be divided.
Knowing this, Wes still filed the fraudulent transfer adversary
against her alleging that the transfer was made to defraud her
creditors, and asking the court to rule that she was not entitled to
her homestead exemption.
I'm trying to get the go ahead from LA Public Counsel to take this
case. I'll need LOTS OF HELP! Case number is LA04-29388-SB,
Consuelo Torres.
Thanks!!!!
Ty Takeuchi
The post was migrated from Yahoo.