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Wells Fargo joint account.
Catherine et al,
I am going to amend SOFA 14 and contact the trustee before the 341. I have declarations prepared for the debtor and his father that the account was set up for estate administration purposes only; that the debtor has made no deposits or withdraws and did not even know about two of the three accounts. As to amending schedule B, I am asserting that pursuant to 541(b)(1) and Ca Prob Code 5301 the fathers bank accounts are not included as property of the estate; and should be listed under SOFA 14 but not Schedule B.
Marvins suggestion to look at probate code 5132-5134 is very helpful. Probate code 5301 delineates a rule of ownership in proportion to net contributions which excludes the joint accounts from the bankruptcy estate.
My concern is that the accounts add up to about $25k and the chapter 7 trustee may not want to step up and make that decision on her own, forcing the debtor file a motion to exclude the accounts from the estate. So do I wait to let the trustee make the first move or should I file a preemptive motion. I would welcome any thoughts on such a motion.
11 U.S.C 541(b) Property of the estate does not include (1) any power that the debtor may exercise solely for the benefit of an entity other than the debtor;
Cal Prob code 5301(a) An account belongs, during the lifetime of all parties, to the parties in proportion to the net contributions by each to the sums on deposit, unless there is clear and convincing evidence of a different intent.
Best regards
Larry Webb
State Bar of California 229344
Central District California
"A Debt Relief Agency"
Check out my Blog
Larry@webbklaw. com
Law Offices of Larry Webb
484 Mobil Ste 43
Camarillo Ca 93010
P 805.987.1400
F 805.987.2866
C 805.750.2150
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Hi Larry:
Contact the Ch 7 TT and ask his office to call the WF office so they will release the money after you amend the Schedule B - don't claim any interest but list the accounts and description and that none of the money in the account is the debtors - don't forget the SOFA, property of another questions.oof the account is not the debtors.
Law Office of Catherine Christiansen
17011 Beach Blvd. Ste 900, Huntington Beach, CA 92647
Tel: (714) 375-6651 Fax: (562) 490-8572
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On Tuesday, March 18, 2014 11:52 AM, Link Schrader wrote:
When I am informed that the debtor's name is on an account that belongs to someone else, I send a letter as follows:
Re: Notification
of Third Party Interest in Funds
Dear Sir or Madam:
This office represents ______whose name appears on bank account # xxxxx-xxxxx held
at Bank of America. Debtor opened
this account with and for her son, _______, about 1992 about the time
her son left for college on the East Coast.
While her son was in college, Debtor would make deposits into the
account to help her son with college expenses.
She has not made deposits into this account for well over 10 years and
claims no ownership interest in this account.
The entirety of the funds in this bank
account belongs to Son whose payroll check is deposited directly
into this account. Debtor desires
that her son not be made aware of her present financial difficulties and has
asked me to write this letter to ensure that her recent chapter 13 bankruptcy
filing does not result in an administrative freeze, set-off, or other action
against her sons bank account.
Under California
law, a bank set-off is prohibited against funds on deposit if the bank is on
notice that the funds belong to someone other than the debtor or are subject to
a third partys security interest. In re Paragon Develop. Enterprises, Inc.
(BC ED CA 1996) 201 BR 254, 257, fn. 5;Chang v. Redding Bank of Commerce (1994) 29 Cal 4th 673, 682.
Should you have any
questions, please do not hesitate to contact this office.
Link Schrader, Attorney
Law Office of Link W. Schrader
P.O. Box 3723, Tustin, CA 92781
Office: (714) 542-5922; Mobile/Text: (310) 413-6924
Fax: (310) 878-4158; www.schrader-law.com
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When I am informed that the debtor's name is on an account that belongs to
someone else, I send a letter as follows:
Re: Notification of Third Party Interest in Funds
Dear Sir or Madam:
This office represents ______whose name appears on bank account #
xxxxx-xxxxx held at Bank of America. Debtor opened this account with and
for her son, _______, about 1992 about the time her son left for college on
the East Coast. While her son was in college, Debtor would make deposits
into the account to help her son with college expenses. She has not made
deposits into this account for well over 10 years and claims no ownership
interest in this account.
The entirety of the funds in this bank account belongs to Son whose payroll
check is deposited directly into this account. Debtor desires that her son
not be made aware of her present financial difficulties and has asked me to
write this letter to ensure that her recent chapter 13 bankruptcy filing
does not result in an administrative freeze, set-off, or other action
against her son's bank account.
Under California law, a bank set-off is prohibited against funds on deposit
if the bank is on notice that the funds belong to someone other than the
debtor or are subject to a third party's security interest. *In re Paragon
Develop. Enterprises, Inc*. (BC ED CA 1996) 201 BR 254, 257, fn. 5;* Chang
v. Redding Bank of Commerce* (1994) 29 Cal 4th 673, 682.
Should you have any questions, please do not hesitate to contact this
office.
*Link Schrader, Attorney*
Law Office of Link W. Schrader
P.O. Box 3723, Tustin, CA 92781
Office: (714) 542-5922; Mobile/Text: (310) 413-6924
Fax: (310) 878-4158; www.schrader-law.com
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Yes, it can be done, but know your trustee. Amend SOFA 14 promptly and
disclose the asset being held for someone else, and include facts
establishing debtor's lack of a nexus between them and the funds. Work the
facts. Be prepared to be asked about it at the 341a, and just know that the
trustee will likely not release the freeze until after the 341a if/when
they're satisfied that the money really isn't that of the debtor.
Than the trustee may release it. You're mileage may very.
Hale
_____
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I just received correspondence from Wells Fargo informing me that they have
frozen two accounts where my ch7 client is a joint holder. Of course client
failed to share that with me because he doesn't "really" own the account.
This is a common estate planning dodge to avoid the cost of a Will or a
Trust.
Has anyone ever been successful arguing that the debtor's interest in such
an account is not vested? There are no exemptions available, in fact I had
the client sign a letter instructing me to file a chapter 7 with assets at
risk (fully paid for motorhome)
Best Regards
Larry Webb
Law Office of Larry Webb
484 Mobil Ste 43
Camarillo, Ca 93010
805-987-1400
http://www.thousandoaksprobate.com/
Email Larry@webbklaw.com
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