Central District Consumer Bankruptcy Attorney's Association

It would be wise to actually read Newman. That case was based on Missouri law which apparently never concluded that payments from a spendthrift trust were bequests, devises or inheritances. What does CA law say? (I don't know.) That is the question. I find it hard to believe that property acquired from a trust upon the death of the trustee/settlor, as opposed to periodic payments from a spendthrift trust, would not be an inheritance, devise or bequest.
Vernon L. Ellicott, Esq.
Certified Family Law Specialist
California State Bar Board of Legal Specialization
A Bankruptcy and Family Law Firm
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I posted the materials from the 10-13-12 seminar.
I spoke with a few of you in attendance after the seminar and it seemed as the last subject of discussion at the seminar: Matter of Newman, 903 F.2d 1150 (7th Cir. 1990) relating to intervivos trusts and 11 U.S.C. 541(a)(5)(A)'s 180 day rule was a little rushed to be fully appreciated.
11 U.S.C. 541(a)(5)(A) states that Any interest in property that would have been property of the estate if such interest had been an interest of the debtor on the date of the filing of the petition and in which the debtor acquires an interest with 180 days after the filing of the petition by bequest, devise or inheritance is property of the estate.
However, property so acquired from an intervivos trust is not acquired by bequest, devise or inheritance and is therefore not property of the estate. Matter of Newman, 903 F.2d 1150 (7th Cir. 1990) disagreeing with In re Moody, 837 F.2d 719 (5th Cir. 1988). This outcome should be the same as Newman under California law.
See question 8 of the hypothetical. Based on Newman if Aunt Millie died 2 weeks after a Chapter 7 petition is filed, naming debtor as one of her beneficiaries, debtor's beneficial interest in the trust is NOT an asset of the bankruptcy estate.
Some of you asked me to post answers to the Hypothetical as we ran out of time to address it at the seminar. I will do so this week.
Mark Jessee

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