.jpg)
Help with a question re: Sch. B #19
It is important to distinguish between dad's interest and daughter's
interest in the trust. Dad seems to have a lifetime income interest,
subject to a spendthrift provision. Daughter's interest is a remainder
interest which ripens when dad dies. It may or may not have a spendthrift
provision. You'll only know by reading the trust.
Pat
Patrick T. Green, Esq.
Fitzgerald & Green, Attorneys at Law
1010 E. Union Street Suite 206
Pasadena, CA 91106
Ph: (626) 449-8433
Fax: (626) 449-0565
pg23@earthlink.net
Sent: Thursday, March 03, 2005 6:48 PM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] Re: Help with a question re: Sch. B #19
Meg,
I looked up your question and agree with Michael Chekian, a spendthrift
trust is EXCLUDABLE from the bankruptcy estate under 541(c)(2). See also
Ehrenberg v. Southern CaL Permanente Med. Group, (In re Moses) 9th Cir 1999
167 F3d 470.
>Reply-To: cdcbaa@yahoogroups.com
>To:
>Subject: RE: [cdcbaa] Re: Help with a question re: Sch. B #19
>Date: Wed, 2 Mar 2005 14:13:21 -0800
>
>The grandfather set up the spendthrift trust for his son - the debtor's
>father. It seems as if there is no way that the debtor can reach this
>money
>until the father dies (the grandfather was an attorney and tried to make it
>impossible for his son to get his hands on the money all at once). The
>debtor tried to get some money to pay her creditors before filing and was
>unsuccessful. It seems as if the only thing now that will satisfy this
>creditor who is handling the trust is to provide something in writing and I
>don't know what I can provide at this point unless I try to reopen the
>case -- if the judge will allow me to. The creditor did bring it to the
>Chap 7 trustee's attention and she did not pursue it. If it is an asset
>that the trustee can reach to pay creditors, the debtor is willing to have
>that happen and I want to do whatever is necessary to accomplish that. A
>little more input on this would really be appreciated!
>Thanks for all the help so far.
>Margaret Hew
>
>-----Original Message-----
>Sent: Wednesday, March 02, 2005 11:02 AM
>To: cdcbaa@yahoogroups.com
>Subject: [cdcbaa] Re: Help with a question re: Sch. B #19
>
>
>
>
>Is this the father's trust or is this a trust someone else
>established with the father as a beneficiary? Assuming it is the
>father's trust, and this secured creditor of the debtor's is acting
>as trustee of the father's trust, the question becomes is the trust
>revocable or not? If the father can make changes including to
>beneficiaries, then the trust is revocable and the bankruptcy estate
>has no interest in it unless of course father dies within 6 months of
>the petition being filed. On the other hand if the trust's terms are
>set in stone and the father or whomever estatblished the trust cannot
>make changes, it is an irrevocable trust. As such the debtor and
>thus the bankruptcy estate has an interest as a residual beneficiary,
>conditional upon the debtor surviving the father. That interest
>should be listed in Schedule B.
>
>If the trust is irrevocable and has a spendthrift clause relating to
>the debtor's right to receive a distribution at the father's death,
>then although an asset of the bankruptcy estate, theoretcally, the
>spendthrift clause may serve to prevent or minimize any distributions
>that would otherwise go to the bankruptcy estate.
>
>Mark Jessee
>
>
>
>
>
>
>
>
>
>
>
>Yahoo! Groups Sponsor
>ADVERTISEMENT
>click here
The post was migrated from Yahoo.
Thank you for the additional (Central District) case. The final bolster for
me --- and I haven't found it yet - is language saying that property
excluded from the bankruptcy estate does not have to be listed in the
petition. For now, I'll go with what I have and try to reopen the case IF
this attorney continues to threaten the debtor.
Sent: Thursday, March 03, 2005 6:48 PM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] Re: Help with a question re: Sch. B #19
Meg,
I looked up your question and agree with Michael Chekian, a spendthrift
trust is EXCLUDABLE from the bankruptcy estate under 541(c)(2). See also
Ehrenberg v. Southern CaL Permanente Med. Group, (In re Moses) 9th Cir 1999
167 F3d 470.
>Reply-To: cdcbaa@yahoogroups.com
>To:
>Subject: RE: [cdcbaa] Re: Help with a question re: Sch. B #19
>Date: Wed, 2 Mar 2005 14:13:21 -0800
>
>The grandfather set up the spendthrift trust for his son - the debtor's
>father. It seems as if there is no way that the debtor can reach this
>money
>until the father dies (the grandfather was an attorney and tried to make it
>impossible for his son to get his hands on the money all at once). The
>debtor tried to get some money to pay her creditors before filing and was
>unsuccessful. It seems as if the only thing now that will satisfy this
>creditor who is handling the trust is to provide something in writing and I
>don't know what I can provide at this point unless I try to reopen the
>case -- if the judge will allow me to. The creditor did bring it to the
>Chap 7 trustee's attention and she did not pursue it. If it is an asset
>that the trustee can reach to pay creditors, the debtor is willing to have
>that happen and I want to do whatever is necessary to accomplish that. A
>little more input on this would really be appreciated!
>Thanks for all the help so far.
>Margaret Hew
>
>-----Original Message-----
>Sent: Wednesday, March 02, 2005 11:02 AM
>To: cdcbaa@yahoogroups.com
>Subject: [cdcbaa] Re: Help with a question re: Sch. B #19
>
>
>
>
>Is this the father's trust or is this a trust someone else
>established with the father as a beneficiary? Assuming it is the
>father's trust, and this secured creditor of the debtor's is acting
>as trustee of the father's trust, the question becomes is the trust
>revocable or not? If the father can make changes including to
>beneficiaries, then the trust is revocable and the bankruptcy estate
>has no interest in it unless of course father dies within 6 months of
>the petition being filed. On the other hand if the trust's terms are
>set in stone and the father or whomever estatblished the trust cannot
>make changes, it is an irrevocable trust. As such the debtor and
>thus the bankruptcy estate has an interest as a residual beneficiary,
>conditional upon the debtor surviving the father. That interest
>should be listed in Schedule B.
>
>If the trust is irrevocable and has a spendthrift clause relating to
>the debtor's right to receive a distribution at the father's death,
>then although an asset of the bankruptcy estate, theoretcally, the
>spendthrift clause may serve to prevent or minimize any distributions
>that would otherwise go to the bankruptcy estate.
>
>Mark Jessee
>
>
>
>
>
>
>
>
>
>
>
>Yahoo! Groups Sponsor
>ADVERTISEMENT
>click here
The post was migrated from Yahoo.
Meg,
I looked up your question and agree with Michael Chekian, a spendthrift
trust is EXCLUDABLE from the bankruptcy estate under 541(c)(2). See also
Ehrenberg v. Southern CaL Permanente Med. Group, (In re Moses) 9th Cir 1999
167 F3d 470.
>Reply-To: cdcbaa@yahoogroups.com
>To:
>Subject: RE: [cdcbaa] Re: Help with a question re: Sch. B #19
>Date: Wed, 2 Mar 2005 14:13:21 -0800
>
>The grandfather set up the spendthrift trust for his son the debtors
>father. It seems as if there is no way that the debtor can reach this
>money
>until the father dies (the grandfather was an attorney and tried to make it
>impossible for his son to get his hands on the money all at once). The
>debtor tried to get some money to pay her creditors before filing and was
>unsuccessful. It seems as if the only thing now that will satisfy this
>creditor who is handling the trust is to provide something in writing and I
>dont know what I can provide at this point unless I try to reopen the
>case -- if the judge will allow me to. The creditor did bring it to the
>Chap 7 trustees attention and she did not pursue it. If it is an asset
>that the trustee can reach to pay creditors, the debtor is willing to have
>that happen and I want to do whatever is necessary to accomplish that. A
>little more input on this would really be appreciated!
>Thanks for all the help so far.
>Margaret Hew
>
>-----Original Message-----
>Sent: Wednesday, March 02, 2005 11:02 AM
>To: cdcbaa@yahoogroups.com
>Subject: [cdcbaa] Re: Help with a question re: Sch. B #19
>
>
>
>
>Is this the father's trust or is this a trust someone else
>established with the father as a beneficiary? Assuming it is the
>father's trust, and this secured creditor of the debtor's is acting
>as trustee of the father's trust, the question becomes is the trust
>revocable or not? If the father can make changes including to
>beneficiaries, then the trust is revocable and the bankruptcy estate
>has no interest in it unless of course father dies within 6 months of
>the petition being filed. On the other hand if the trust's terms are
>set in stone and the father or whomever estatblished the trust cannot
>make changes, it is an irrevocable trust. As such the debtor and
>thus the bankruptcy estate has an interest as a residual beneficiary,
>conditional upon the debtor surviving the father. That interest
>should be listed in Schedule B.
>
>If the trust is irrevocable and has a spendthrift clause relating to
>the debtor's right to receive a distribution at the father's death,
>then although an asset of the bankruptcy estate, theoretcally, the
>spendthrift clause may serve to prevent or minimize any distributions
>that would otherwise go to the bankruptcy estate.
>
>Mark Jessee
>
>
>
>
>
>
>
>
>
>
>
>Yahoo! Groups Sponsor
>ADVERTISEMENT
>click here
The post was migrated from Yahoo.
charset="windows-1250"
I think 11 USC 541 (c)(2) hits it dead on. I will use that as my argument
with the trust attorney in West Virginia! Thank you so much!
Sent: Wednesday, March 02, 2005 5:45 PM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] Re: Help with a question re: Sch. B #19
I believe (as confirmed by direct experience in one of my clients cases
with Chapter 7 Trustees office David Gill) that even an irrevocable trust
with a spendthrift clause for the benefit of the debtor would not be
property of the bankruptcy estate per 11 USC 541(c)(2), and Patterson v.
Shumate USSC case. So arguably the Debtor would not even have to schedule
this asset.
Chekian Law Office
Michael Chekian, Esq.
11400 W. Olympic Blvd. #200
Los Angeles, CA 90064
(310) 390-5529 (Tel.)
(310) 445-8879 (Fax)
mike@cheklaw.com (e-mail)
cheklaw.com (web site)
Sent: Wednesday, March 02, 2005 11:02 AM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] Re: Help with a question re: Sch. B #19
Is this the father's trust or is this a trust someone else
established with the father as a beneficiary? Assuming it is the
father's trust, and this secured creditor of the debtor's is acting
as trustee of the father's trust, the question becomes is the trust
revocable or not? If the father can make changes including to
beneficiaries, then the trust is revocable and the bankruptcy estate
has no interest in it unless of course father dies within 6 months of
the petition being filed. On the other hand if the trust's terms are
set in stone and the father or whomever estatblished the trust cannot
make changes, it is an irrevocable trust. As such the debtor and
thus the bankruptcy estate has an interest as a residual beneficiary,
conditional upon the debtor surviving the father. That interest
should be listed in Schedule B.
If the trust is irrevocable and has a spendthrift clause relating to
the debtor's right to receive a distribution at the father's death,
then although an asset of the bankruptcy estate, theoretcally, the
spendthrift clause may serve to prevent or minimize any distributions
that would otherwise go to the bankruptcy estate.
Mark Jessee
Yahoo! Groups Sponsor
ADVERTISEMENT
click here
The post was migrated from Yahoo.
Your facts are still not clear.
Is the father a life income beneficiary of an irrevocable trust (set up by
his parent?) and your client a principal beneficiary upon his death? Or
does the father have a revocable living trust which names the daughter as a
death beneficiary and which, due to her creditor concerns, has a spendthrift
provision?
In the first case, she has a vested interest, but without a date certain as
to when it will ripen. If there is a non assignability provision, per Prob
Code 15301, she cannot transfer her interest and neither can the trustee.
The rules change when he dies and there is the opportunity for attachment by
creditors.
In the second case, she has only an expectancy which depends on him (1) not
revoking the trust and (2) not spending it all before he dies. This trust
acts as a will substitute and is no more an asset than being named as a
bennie in someone's will is an asset.
Patrick T. Green, Esq.
Fitzgerald & Green, Attorneys at Law
1010 E. Union Street Suite 206
Pasadena, CA 91106
Ph: (626) 449-8433
Fax: (626) 449-0565
pg23@earthlink.net
Sent: Tuesday, March 01, 2005 4:58 PM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] Help with a question re: Sch. B #19
The debtor's father has the trust now and when he dies whatever money is
left is supposed to go the children. I hope that doesn't mean reopening
the case?
Sent: Tuesday, March 01, 2005 4:37 PM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] Help with a question re: Sch. B #19
Some thoughts:
Are you saying that the trust exists NOW and that your client's share is
NOW subject to a spendthrift trust provision, or are you saying that the
trust WILL COME INTO EXISTENCE when father dies and will THEN be subject
to a spendthrift provision?
If the latter is the case, then it sounds like a violation of the
discharge injunction in the making. If they follow through, think about
reopening the bankruptcy case and suing the pants off of them.
If the former is the case, then the inheritence becomes property of the
estate because the asset was never scheduled and never abandoned for
that reason. If this is the case, you may want to reopen the
bankruptcy, file an amended Schedule B and then let nature take its
course.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem
500 N. Brand Blvd., #460, Glendale, CA 91203
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
Sent: Tuesday, March 01, 2005 1:05 PM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] Help with a question re: Sch. B #19
My client will inherit money someday IF her father dies. He has a
spendthrift trust. Since her father is not deceased (a decedent) I
did not think at the time of filing that it should be listed under
Schedule B #19. The father is young (in his 50's).
A secured creditor who also manages the father's trust thinks the
interest should be listed. At the 341a hearing, the debtor said that
she would receive money when her father dies. But that she is not
able to get money now or else she would not be filing bankruptcy.
The secured creditor also wrote to the trustee and I think he spoke
to the trustee. I encouraged him to do so if he had any questions or
concerns. I also called the Chapter 7 trustee's office and they did
not see a question of an asset. So, now that the case has been
discharged, the secured creditor handling the father's trust is
saying that if the father dies the debtor will not be able to
inherit. He wants something is writing to show that the trust money
was not an asset. The trustee will probably not provide a letter
saying this so I am asking for any suggestions. I will get a copy of
the tape of the 341a hearing but I don't think that will satisfy this
attorney.
Thanks.
Margaret Hew
Yahoo! Groups Links
Yahoo! Groups Links
No virus found in this incoming message.
Checked by AVG Anti-Virus.
Version: 7.0.300 / Virus Database: 266.5.7 - Release Date: 3/1/2005
No virus found in this outgoing message.
Checked by AVG Anti-Virus.
Version: 7.0.300 / Virus Database: 266.5.7 - Release Date: 3/1/2005
Yahoo! Groups Links
The post was migrated from Yahoo.
I believe (as confirmed by direct experience in one of my client's cases
with Chapter 7 Trustee's office David Gill) that even an irrevocable trust
with a spendthrift clause for the benefit of the debtor would not be
property of the bankruptcy estate per 11 USC 541(c)(2), and Patterson v.
Shumate USSC case. So arguably the Debtor would not even have to schedule
this asset.
Chekian Law Office
Michael Chekian, Esq.
11400 W. Olympic Blvd. #200
Los Angeles, CA 90064
(310) 390-5529 (Tel.)
(310) 445-8879 (Fax)
mike@cheklaw.com (e-mail)
cheklaw.com (web site)
Sent: Wednesday, March 02, 2005 11:02 AM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] Re: Help with a question re: Sch. B #19
Is this the father's trust or is this a trust someone else
established with the father as a beneficiary? Assuming it is the
father's trust, and this secured creditor of the debtor's is acting
as trustee of the father's trust, the question becomes is the trust
revocable or not? If the father can make changes including to
beneficiaries, then the trust is revocable and the bankruptcy estate
has no interest in it unless of course father dies within 6 months of
the petition being filed. On the other hand if the trust's terms are
set in stone and the father or whomever estatblished the trust cannot
make changes, it is an irrevocable trust. As such the debtor and
thus the bankruptcy estate has an interest as a residual beneficiary,
conditional upon the debtor surviving the father. That interest
should be listed in Schedule B.
If the trust is irrevocable and has a spendthrift clause relating to
the debtor's right to receive a distribution at the father's death,
then although an asset of the bankruptcy estate, theoretcally, the
spendthrift clause may serve to prevent or minimize any distributions
that would otherwise go to the bankruptcy estate.
Mark Jessee
Yahoo! Groups Sponsor
ADVERTISEMENT
The post was migrated from Yahoo.
The grandfather set up the spendthrift trust for his son the debtors
father. It seems as if there is no way that the debtor can reach this money
until the father dies (the grandfather was an attorney and tried to make it
impossible for his son to get his hands on the money all at once). The
debtor tried to get some money to pay her creditors before filing and was
unsuccessful. It seems as if the only thing now that will satisfy this
creditor who is handling the trust is to provide something in writing and I
dont know what I can provide at this point unless I try to reopen the
case -- if the judge will allow me to. The creditor did bring it to the
Chap 7 trustees attention and she did not pursue it. If it is an asset
that the trustee can reach to pay creditors, the debtor is willing to have
that happen and I want to do whatever is necessary to accomplish that. A
little more input on this would really be appreciated!
Thanks for all the help so far.
Margaret Hew
Sent: Wednesday, March 02, 2005 11:02 AM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] Re: Help with a question re: Sch. B #19
Is this the father's trust or is this a trust someone else
established with the father as a beneficiary? Assuming it is the
father's trust, and this secured creditor of the debtor's is acting
as trustee of the father's trust, the question becomes is the trust
revocable or not? If the father can make changes including to
beneficiaries, then the trust is revocable and the bankruptcy estate
has no interest in it unless of course father dies within 6 months of
the petition being filed. On the other hand if the trust's terms are
set in stone and the father or whomever estatblished the trust cannot
make changes, it is an irrevocable trust. As such the debtor and
thus the bankruptcy estate has an interest as a residual beneficiary,
conditional upon the debtor surviving the father. That interest
should be listed in Schedule B.
If the trust is irrevocable and has a spendthrift clause relating to
the debtor's right to receive a distribution at the father's death,
then although an asset of the bankruptcy estate, theoretcally, the
spendthrift clause may serve to prevent or minimize any distributions
that would otherwise go to the bankruptcy estate.
Mark Jessee
Yahoo! Groups Sponsor
ADVERTISEMENT
click here
The post was migrated from Yahoo.
The debtor's father has the trust now and when he dies whatever money is
left is supposed to go the children. I hope that doesn't mean reopening
the case?
Sent: Tuesday, March 01, 2005 4:37 PM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] Help with a question re: Sch. B #19
Some thoughts:
Are you saying that the trust exists NOW and that your client's share is
NOW subject to a spendthrift trust provision, or are you saying that the
trust WILL COME INTO EXISTENCE when father dies and will THEN be subject
to a spendthrift provision?
If the latter is the case, then it sounds like a violation of the
discharge injunction in the making. If they follow through, think about
reopening the bankruptcy case and suing the pants off of them.
If the former is the case, then the inheritence becomes property of the
estate because the asset was never scheduled and never abandoned for
that reason. If this is the case, you may want to reopen the
bankruptcy, file an amended Schedule B and then let nature take its
course.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem
500 N. Brand Blvd., #460, Glendale, CA 91203
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
Business bankruptcy specialist cert. by Amer. Bd. of Certification
Sent: Tuesday, March 01, 2005 1:05 PM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] Help with a question re: Sch. B #19
My client will inherit money someday IF her father dies. He has a
spendthrift trust. Since her father is not deceased (a decedent) I
did not think at the time of filing that it should be listed under
Schedule B #19. The father is young (in his 50's).
A secured creditor who also manages the father's trust thinks the
interest should be listed. At the 341a hearing, the debtor said that
she would receive money when her father dies. But that she is not
able to get money now or else she would not be filing bankruptcy.
The secured creditor also wrote to the trustee and I think he spoke
to the trustee. I encouraged him to do so if he had any questions or
concerns. I also called the Chapter 7 trustee's office and they did
not see a question of an asset. So, now that the case has been
discharged, the secured creditor handling the father's trust is
saying that if the father dies the debtor will not be able to
inherit. He wants something is writing to show that the trust money
was not an asset. The trustee will probably not provide a letter
saying this so I am asking for any suggestions. I will get a copy of
the tape of the 341a hearing but I don't think that will satisfy this
attorney.
Thanks.
Margaret Hew
Yahoo! Groups Links
Yahoo! Groups Links
No virus found in this incoming message.
Checked by AVG Anti-Virus.
Version: 7.0.300 / Virus Database: 266.5.7 - Release Date: 3/1/2005
No virus found in this outgoing message.
Checked by AVG Anti-Virus.
Version: 7.0.300 / Virus Database: 266.5.7 - Release Date: 3/1/2005
The post was migrated from Yahoo.