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Living Trust a Fraudulent Transfer?
I agree with David. Since the transfer was not effective to begin with as the trust was a revocable trust, debtor should be allowed her homestead exemption.
Sent: Wednesday, February 09, 2005 8:47 AM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] Living Trust a Fraudulent Transfer?
Absurd. There are cases, I don't know them off the top of my head,
which say that homestead is retained notwithstanding transfer to
revocable trust. No doubt that house is still property of the estate,
but she does get to keep her homestead. Also 548 action is not well
taken because by operation of CA law (Probate Code), revocable trust not
effective as against creditors, so transfer was never effective in the
first instance.
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: Wednesday, February 09, 2005 7:20 AM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] Living Trust a Fraudulent Transfer?
Hi everyone,
I just interviewed a 74 year old woman who filed Ch. 7 Pro Se. Ch.
7 Te has hired counsel, (name given upon request). Woman set up a
living trust for her only valuable asset, her home, two months
before filing. Trustee's counsel filed adversary complaint alleging
that putting the home into a revocable living trust is a fraudulent
transfer and therefore debtor is not entitled to her $125,000
homestead exemption.
Any comments?
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A "revocable" trust is exactly what it says. It could be revoked by the
trustor at any time during his or her lifetime. If a bankruptcy is
filed, the trustee acquires the same rights, revoke the trust and bring
the trust corpus back into the bankruptcy estate. If the trust was
"irrevocable", then the transfer could be considered fraudulent if
within the statutory timeframe for fraudulent conveyances, in which case
the trustee could undo the transfer.
I could be wrong. But that's my understanding. Comments anyone?
________________________________
The post was migrated from Yahoo.
Hi everyone,
I just interviewed a 74 year old woman who filed Ch. 7 Pro Se. Ch.
7 Te has hired counsel, (name given upon request). Woman set up a
living trust for her only valuable asset, her home, two months
before filing. Trustee's counsel filed adversary complaint alleging
that putting the home into a revocable living trust is a fraudulent
transfer and therefore debtor is not entitled to her $125,000
homestead exemption.
Any comments?
The post was migrated from Yahoo.