Central District Consumer Bankruptcy Attorney's Association

Isn't the problem that a business trust cannot file? When the case is invalid, how can a party exert exemptions. Businesses get no exemptions.
d
Dennis McGoldrick, 350 S. Crenshaw Bl., #A207B, Torrance, Ca 90503 310-328-1001-voice
> On Jul 30, 2014, at 10:52 PM, "Michael Avanesian michael@avanesianlaw.com [cdcbaa]" wrote:
>
> I'm curious about this line, "you cant exempt property you don>
> I think that even if we assume this trust is a business trust and cannot be attacked on those grounds, cannot be undone, etc. What prevents the debtor from asserting her homestead exemption under the facts as presented? More specifically, what part of the definition for qualification to be entitled to the homestead exemption under 704.730 is not satisfied here?
>
> I always thought (although, I have little experience) that a homestead exemption applied to all primary residences where the debtor lived before a judgment was recorded. In the case of a bk, lived before the bk petition was filed. There is no ownership requirement, is there?
>
> Even assuming there is some kind of ownership requirement, isn't there a good argument that this situation is one where the homestead exemption should apply? After all, the "dwelling" definition uses the language "may include but is not limited to."
>
> Also, if you look at 704.710(a)(6), it looks like a business trust falls within the definition of 6566. "Stock cooperative," particularly when there is only 1 beneficiary.
>
>
> Sincerely,
> Michael Avanesian
>
>> On Wed, Jul 30, 2014 at 2:29 PM, 'Larry Webb' larry@webbklaw.com [cdcbaa] wrote:
>>
>> This is not a probate trust because a business trust is excluded as a trust under the probate code s82. I think Holly is describing a Massachusetts trust; which some people inappropriately use for 1) asset protection and or 2) tax avoidance. The trust sounds a bit dodgy. A simple deed transfer would have to be disclosed and I would anticipate some fraudulent transfer questions; at the minimum the transfer would not be the same as probate trust transfer because there is a change in entity ownership. The Los Angeles assessor has been going after these trusts.
>>
>>
>>
>> I think Holly said the trustor never owned the property, so presumptively the trustee purchased the property and holds legal title and the beneficiary has equitable title; but trustee and the beneficiary are the same person so. . . . I think the tax dodge is avoiding the minimum corp/LLC tax. She is trying to claim a homestead so there is no income issue. Apparently the bankruptcy trustee is saying business trust is a business entity [which it is] and not a probate trust; therefore it is not the debtors property and you cant exempt property you dont own.
>>
>>
>>
>> Maybe a petition to determine ownership would solve the problem. But there would be a lot of questions to answer on the way.
>>
>>
>>
>>
>>
>>
>>
>> Best regards
>>
>> Larry Webb
>>
>>
>>
>>
>>
>> California Board of Legal Specialization
>>
>> Certified Specialist in Bankruptcy Law
>>
>>
>>
>> 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
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>
>> Sent: Wednesday, July 30, 2014 1:23 PM
>> To: cdcbaa@yahoogroups.com
>> Subject: RE: [cdcbaa] Chapter 13 case - I need to invalidate a trust and have the property titled in the rightful owner (debtor)
>>
>>
>>
>>
>>
>> Im not sure Im seeing the problem. As attorneys, we regularly advise clients to do wills and trusts, and put real estate into the trust. That does not stop the person from claiming the homestead exemption under applicable state law, so why would it in a bankruptcy?
>>
>>
>>
>> Vernon L. Ellicott, Esq.
>>
>> Certified Family Law Specialist
>>
>> California State Bar Board of Legal Specialization
>>
>> A Bankruptcy and Family Law Firm
>>
>> Law Offices of Vernon L. Ellicott
>>
>> 325 E. Hillcrest Drive, Suite 150
>>
>> Thousand Oaks, CA 91360-7799
>>
>> (805) 446-6262 Phone
>>
>> (661) 222-2922 Phone
>>
>> (805) 446-6264 Fax
>>
>>
>>
>>
>>
>> This e-mail transmission and any documents, files, or previous e-mail messages attached to it, may contain confidential information from the LAW OFFICES OF VERNON L. ELLICOTT that is legally privileged. If you are not the intended recipient, or a person responsible for delivering it to the intended recipient, you are hereby notified that any disclosure, copying, distribution or use of any of the information contained in or attached to this message is STRICTLY PROHIBITED. If you received this transmission in error, please immediately notify us by reply e-mail, or by telephone at (805) 446-6262, and destroy the original transmission and its attachments and all copies of any kind, without reading them or saving them in any way. Thank you.
>>
>>
>>
>> A bad day on the bike is better than a good day on the golf course!
>>
>>
>>
>>
>>
>> Sent: Wednesday, July 30, 2014 12:27 PM
>> To: cdcbaa
>> Subject: Re: [cdcbaa] Chapter 13 case - I need to invalidate a trust and have the property titled in the rightful owner (debtor)
>>
>>
>>
>>
>>
>> Trustee (debtor) can amend the bylaws so long as they do not touch on or change any term of the Declaration of Trust.
>>
>> Trust also says that: Trustee may terminate and dissolve this Trust at any time, but only
>> with the assent of the owners of at least one hundred percent (100%) of the shares (DEBTOR), or their proxies, voting at a meeting called for that purpose pursuant to a notice given as hereinabove provided and specifying the purpose of the meeting.
>>
>> On the termination of this Trust by any cause, Trustee shall liquidate the Trust estate,
>> wind up its affairs, and dispose of its property and assets at public or private sales, and, after
>> discharging all legal obligations of the Trust, shall distribute the proceeds among the
>> shareholders in propoliion to their interests, and for these purposes Trustee shall continue to act
>> until such duties have been fully performed. [THIS COULD BE A PROBLEM because the termination may require Debtor to sell the property.]
>>
>> But trust also says:
>>
>> Trustee(s) shall hold the legal title to all property at any time belonging to the Trust
>> and the Trustee shall have the power to cause legal title to any property of this Trust
>> to be held in the name of one or more of the Trustee or by any other person, on such
>> terms, in such manner, and with such powers as the Trustee hereunder may determine
>> and without disclosure that the Trustee are interested therein. They shall have
>> absolute and elusive power and control over the management and conduct of the
>> businesses and affairs of the Trust, free from any power of control on the part of the
>> shareholders.
>> (b) Trustee may hold, manage, deal with, and dispose of the property and business of the
>> Trust in the same manner as if they were the absolute proprietors thereof, subject only
>> to the specific limitations herein placed on their powers. The enumeration of powers
>> contained herein shall not be construed as limiting in any way the general powers
>> hereby-conferred on Trustee. They shall have all powers necessary, convenient, or
>> appropriate to the purposes and ends of this Trust, and are authorized to take any
>> action, which they deed property to carry out such purposes.
>> (c) Trustee shall have the powers, amount others, to purchase or otherwise acquire
>> property, and to sell, exchange, lease, mortgage, pledge, or in any manner dispose,
>> encumber, improve, or deal with the property of the Trust, or any part thereof or any
>> interest therein, on such terms and for such consideration and purposes as they deem
>> proper.
>> (d) Trustee shall have the power to loan money in their control as Trustee, with or
>> without security, on such terms as they deem expedient. Trustee may engage in
>> business, manufacture, and deal in good, wares, and merchandise, incur indebtedness,
>> borrow or loan money with or without security, enter into contracts of all kinds,
>> without exception.
>> (e) Trustee may sue and be sued and prosecute and defend any and all actions affecting
>> the Trust or its business or property, either in the name of the Trust or in their own
>> names; they may adopt and enforce such bylaws or rules and regulations, not
>> inconsistent with the provisions of this instrument, as they may from time to time
>> deem expedient; they may adopt and use a common seal; they may vote in person or
>> by proxy and stock belonging to the Trust estate; and receive the dividends thereon.
>> The enumeration of specific duties and powers shall not be construed in any way as a
>> limitation on the general powers intended to be conferred on Trustee.
>>
>>
>>
>> Under the above provision it seems that if she "holds legal title" since she is the trustee, then maybe she should be entitled to the homestead because of that. Also, maybe she could just transfer the property into her name right now pursuant to the above section, but I was advised by a probate attorney who deals with trusts and invalid trusts that we would be wise to seek a court order before just making the transfer.
>>
>> Thoughts?
>>
>>
>>
>>
>>
>> Holly Roark
>>
>> Certified Bankruptcy Specialist*
>>
>> and Sports Lawyer
>>
>> holly@roarklawoffices.com **primary email address**
>>
>> www.roarklawoffices.com
>>
>> Central District of California
>>
>> Consumer Bankruptcy Attorney
>>
>> 1875 Century Park East, Suite 600
>>
>> Los Angeles, CA 90067
>>
>> T (310) 553-2600
>>
>> F (310) 553-2601
>>
>> *By State Bar of California Board of Legal Specialization
>>
>> **For a quicker response, email me at holly@roarklawoffices.com.
>>
>> I only use gmail for my listservs, and am likely to miss private emails
>>
>> directed to my gmail account.**
>>
>>
>>
>>
>>
>> On Wed, Jul 30, 2014 at 11:30 AM, 'Vernon L. Ellicott, Esq.' vle@vlelaw.com [cdcbaa] wrote:
>>
>>
>>
>> First question is, What does the trust itself say about dissolving or amending it?
>>
>>
>>
>> Vernon L. Ellicott, Esq.
>>
>> Certified Family Law Specialist
>>
>> California State Bar Board of Legal Specialization
>>
>> A Bankruptcy and Family Law Firm
>>
>> Law Offices of Vernon L. Ellicott
>>
>> 325 E. Hillcrest Drive, Suite 150
>>
>> Thousand Oaks, CA 91360-7799
>>
>> (805) 446-6262 Phone
>>
>> (661) 222-2922 Phone
>>
>> (805) 446-6264 Fax
>>
>>
>>
>>
>>
>> This e-mail transmission and any documents, files, or previous e-mail messages attached to it, may contain confidential information from the LAW OFFICES OF VERNON L. ELLICOTT that is legally privileged. If you are not the intended recipient, or a person responsible for delivering it to the intended recipient, you are hereby notified that any disclosure, copying, distribution or use of any of the information contained in or attached to this message is STRICTLY PROHIBITED. If you received this transmission in error, please immediately notify us by reply e-mail, or by telephone at (805) 446-6262, and destroy the original transmission and its attachments and all copies of any kind, without reading them or saving them in any way. Thank you.
>>
>>
>>
>> A bad day on the bike is better than a good day on the golf course!
>>
>>
>>
>>
>>
>> Sent: Wednesday, July 30, 2014 11:13 AM
>> To: Strictly Bankruptcy Issues; cdcbaa
>> Subject: [cdcbaa] Chapter 13 case - I need to invalidate a trust and have the property titled in the rightful owner (debtor)
>>
>>
>>
>>
>>
>> Hotly contested case. Now in a chapter 13, converted from a 7. I need to invalidate a trust and have the property titled in the rightful owner (debtor) so she can take the homestead. Homestead is contested because the house is titled in the name of a "business trust" and the argument against the homestead is that the debtor only owns shares in the trust.
>>
>> We want to record the transfer documents to put the house back into her name, but I think we need an order invalidating the "business trust".
>>
>> It seems this would be done as an AP rather than a motion as it's esentially to determine the Debtor's interest in the property.
>>
>> Does anyone have a sample of what such an action would look like, or something similar?
>>
>> Debtor is beneficiary and trustee of the trust, but NOT the trustor. The trustor is a straw person who never owned the property that is the res of the trust. The trust is a sham, but I need to prove all this and get the house titled in the Debtor's name. We've declared the homestead, of course, on schedule C, but have multiple parties objecting to it because of this business trust.
>>
>>
>>
>> Help! Need samples, even if they are from probate court or somewhere else. I just need to invalidate this trust and show that the debtor is the rightful owner. Thanks.
>>
>>
>>
>>
>> Holly Roark
>>
>> Certified Bankruptcy Specialist*
>>
>> and Sports Lawyer
>>
>> holly@roarklawoffices.com **primary email address**
>>
>> www.roarklawoffices.com
>>
>> Central District of California
>>
>> Consumer Bankruptcy Attorney
>>
>> 1875 Century Park East, Suite 600
>>
>> Los Angeles, CA 90067
>>
>> T (310) 553-2600
>>
>> F (310) 553-2601
>>
>> *By State Bar of California Board of Legal Specialization
>>
>> **For a quicker response, email me at holly@roarklawoffices.com.
>>
>> I only use gmail for my listservs, and am likely to miss private emails
>>
>> directed to my gmail account.**
>>
>
>

The post was migrated from Yahoo.

Is the straw person available to stipulate?
dd
Dennis McGoldrick, 350 S. Crenshaw Bl., #A207B, Torrance, Ca 90503 310-328-1001-voice
> On Jul 30, 2014, at 11:13 AM, "Holly Roark hollyroark22@gmail.com [cdcbaa]" wrote:
>
> Hotly contested case. Now in a chapter 13, converted from a 7. I need to invalidate a trust and have the property titled in the rightful owner (debtor) so she can take the homestead. Homestead is contested because the house is titled in the name of a "business trust" and the argument against the homestead is that the debtor only owns shares in the trust.
>
> We want to record the transfer documents to put the house back into her name, but I think we need an order invalidating the "business trust".
>
> It seems this would be done as an AP rather than a motion as it's esentially to determine the Debtor's interest in the property.
>
> Does anyone have a sample of what such an action would look like, or something similar?
>
> Debtor is beneficiary and trustee of the trust, but NOT the trustor. The trustor is a straw person who never owned the property that is the res of the trust. The trust is a sham, but I need to prove all this and get the house titled in the Debtor's name. We've declared the homestead, of course, on schedule C, but have multiple parties objecting to it because of this business trust.
>
> Help! Need samples, even if they are from probate court or somewhere else. I just need to invalidate this trust and show that the debtor is the rightful owner. Thanks.
>
>
> Holly Roark
> Certified Bankruptcy Specialist*
> and Sports Lawyer
> holly@roarklawoffices.com **primary email address**
> www.roarklawoffices.com
> Central District of California
> Consumer Bankruptcy Attorney
> 1875 Century Park East, Suite 600
> Los Angeles, CA 90067
> T (310) 553-2600
> F (310) 553-2601
> *By State Bar of California Board of Legal Specialization
>
> **For a quicker response, email me at holly@roarklawoffices.com.
> I only use gmail for my listservs, and am likely to miss private emails
> directed to my gmail account.**
>
>
On Jul 30, 2014, at 11:13 AM, "Holly Roark hollyroark22@gmail.com [cdcbaa]" <cdcbaa@yahoogroups.com> wrote:

Hotly contested case. Now in a chapter 13, converted from a 7. I need to invalidate a trust and have the property titled in the rightful owner (debtor) so she can take the homestead. Homestead is contested because the house is titled in the name of a "business trust" and the argument against the homestead is that the debtor only owns shares in the trust.
We want to record the transfer documents to put the house back into her name, but I think we need an order invalidating the "business trust". It seems this would be done as an AP rather than a motion as it's esentially to determine the Debtor's interest in the property.
Does anyone have a sample of what such an action would look like, or something similar?Debtor is beneficiary and trustee of the trust, but NOT the trustor. The trustor is a straw person who never owned the property that is the res of the trust. The trust is a sham, but I need to prove all this and get the house titled in the Debtor's name. We've declared the homestead, of course, on schedule C, but have multiple parties objecting to it because of this business trust.
Help! Need samples, even if they are from probate court or somewhere else. I just need to invalidate this trust and show that the debtor is the rightful owner. Thanks.
Holly RoarkCertified Bankruptcy Specialist*and Sports Lawyer
holly@roarklawoffices.com **primary email address**
www.roarklawoffices.com
Central District of California
Consumer Bankruptcy Attorney
1875 Century Park East, Suite 600
Los Angeles, CA 90067
T (310) 553-2600
F (310) 553-2601
*By State Bar of California Board of Legal
Specialization
The post was migrated from Yahoo.

Stock cooperative refers situations involving a group of people sharing ownership of a common property and each participant is then allowed to live in a unit of the property. I've only seen one of these in 20 years of practicing law. There are statutory definitions and operational requirements in the business and professions code. I think it's far more common in places like New York City. Each member the cooperative owns a share of stock in the cooperative corporation. Along with that comes a corresponding right to lease and reside in one of the units. The bottom line though is One person does not a co-op make.
In California pursuant to probate code section 18,200 there is no distinction between a revocable inter vivos trust and the living trustee beneficiary who created the trust. This is the garden-variety revocable trust commonly used for estate planning purposes. Judgment Creditor claims are not hindered in any way if assets of the judgment debtor are held in a revocable trust.
Alternatively If you form a corporation and convey your house into the corporation in exchange for an ownership interest in the corporation you no longer own the real property. the corporation does. You only own the shares of stock of the corporation, an intangible asset. You cannot claim a homestead exemption in the stock just because you live in the house belonging to the Corporation you are a shareholder. I believe that's what Larry meant by stating you can't exempt property you don't own.
Mark Jessee
Sent from my iPhone
> On Jul 30, 2014, at 10:52 PM, "Michael Avanesian michael@avanesianlaw.com [cdcbaa]" wrote:
>
> I'm curious about this line, "you cant exempt property you don>
> I think that even if we assume this trust is a business trust and cannot be attacked on those grounds, cannot be undone, etc. What prevents the debtor from asserting her homestead exemption under the facts as presented? More specifically, what part of the definition for qualification to be entitled to the homestead exemption under 704.730 is not satisfied here?
>
> I always thought (although, I have little experience) that a homestead exemption applied to all primary residences where the debtor lived before a judgment was recorded. In the case of a bk, lived before the bk petition was filed. There is no ownership requirement, is there?
>
> Even assuming there is some kind of ownership requirement, isn't there a good argument that this situation is one where the homestead exemption should apply? After all, the "dwelling" definition uses the language "may include but is not limited to."
>
> Also, if you look at 704.710(a)(6), it looks like a business trust falls within the definition of 6566. "Stock cooperative," particularly when there is only 1 beneficiary.
>
>
> Sincerely,
> Michael Avanesian
>
>> On Wed, Jul 30, 2014 at 2:29 PM, 'Larry Webb' larry@webbklaw.com [cdcbaa] wrote:
>>
>> This is not a probate trust because a business trust is excluded as a trust under the probate code s82. I think Holly is describing a Massachusetts trust; which some people inappropriately use for 1) asset protection and or 2) tax avoidance. The trust sounds a bit dodgy. A simple deed transfer would have to be disclosed and I would anticipate some fraudulent transfer questions; at the minimum the transfer would not be the same as probate trust transfer because there is a change in entity ownership. The Los Angeles assessor has been going after these trusts.
>>
>>
>>
>> I think Holly said the trustor never owned the property, so presumptively the trustee purchased the property and holds legal title and the beneficiary has equitable title; but trustee and the beneficiary are the same person so. . . . I think the tax dodge is avoiding the minimum corp/LLC tax. She is trying to claim a homestead so there is no income issue. Apparently the bankruptcy trustee is saying business trust is a business entity [which it is] and not a probate trust; therefore it is not the debtors property and you cant exempt property you dont own.
>>
>>
>>
>> Maybe a petition to determine ownership would solve the problem. But there would be a lot of questions to answer on the way.
>>
>>
>>
>>
>>
>>
>>
>> Best regards
>>
>> Larry Webb
>>
>>
>>
>>
>>
>> California Board of Legal Specialization
>>
>> Certified Specialist in Bankruptcy Law
>>
>>
>>
>> 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
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>
>> Sent: Wednesday, July 30, 2014 1:23 PM
>> To: cdcbaa@yahoogroups.com
>> Subject: RE: [cdcbaa] Chapter 13 case - I need to invalidate a trust and have the property titled in the rightful owner (debtor)
>>
>>
>>
>>
>>
>> Im not sure Im seeing the problem. As attorneys, we regularly advise clients to do wills and trusts, and put real estate into the trust. That does not stop the person from claiming the homestead exemption under applicable state law, so why would it in a bankruptcy?
>>
>>
>>
>> Vernon L. Ellicott, Esq.
>>
>> Certified Family Law Specialist
>>
>> California State Bar Board of Legal Specialization
>>
>> A Bankruptcy and Family Law Firm
>>
>> Law Offices of Vernon L. Ellicott
>>
>> 325 E. Hillcrest Drive, Suite 150
>>
>> Thousand Oaks, CA 91360-7799
>>
>> (805) 446-6262 Phone
>>
>> (661) 222-2922 Phone
>>
>> (805) 446-6264 Fax
>>
>>
>>
>>
>>
>> This e-mail transmission and any documents, files, or previous e-mail messages attached to it, may contain confidential information from the LAW OFFICES OF VERNON L. ELLICOTT that is legally privileged. If you are not the intended recipient, or a person responsible for delivering it to the intended recipient, you are hereby notified that any disclosure, copying, distribution or use of any of the information contained in or attached to this message is STRICTLY PROHIBITED. If you received this transmission in error, please immediately notify us by reply e-mail, or by telephone at (805) 446-6262, and destroy the original transmission and its attachments and all copies of any kind, without reading them or saving them in any way. Thank you.
>>
>>
>>
>> A bad day on the bike is better than a good day on the golf course!
>>
>>
>>
>>
>>
>> Sent: Wednesday, July 30, 2014 12:27 PM
>> To: cdcbaa
>> Subject: Re: [cdcbaa] Chapter 13 case - I need to invalidate a trust and have the property titled in the rightful owner (debtor)
>>
>>
>>
>>
>>
>> Trustee (debtor) can amend the bylaws so long as they do not touch on or change any term of the Declaration of Trust.
>>
>> Trust also says that: Trustee may terminate and dissolve this Trust at any time, but only
>> with the assent of the owners of at least one hundred percent (100%) of the shares (DEBTOR), or their proxies, voting at a meeting called for that purpose pursuant to a notice given as hereinabove provided and specifying the purpose of the meeting.
>>
>> On the termination of this Trust by any cause, Trustee shall liquidate the Trust estate,
>> wind up its affairs, and dispose of its property and assets at public or private sales, and, after
>> discharging all legal obligations of the Trust, shall distribute the proceeds among the
>> shareholders in propoliion to their interests, and for these purposes Trustee shall continue to act
>> until such duties have been fully performed. [THIS COULD BE A PROBLEM because the termination may require Debtor to sell the property.]
>>
>> But trust also says:
>>
>> Trustee(s) shall hold the legal title to all property at any time belonging to the Trust
>> and the Trustee shall have the power to cause legal title to any property of this Trust
>> to be held in the name of one or more of the Trustee or by any other person, on such
>> terms, in such manner, and with such powers as the Trustee hereunder may determine
>> and without disclosure that the Trustee are interested therein. They shall have
>> absolute and elusive power and control over the management and conduct of the
>> businesses and affairs of the Trust, free from any power of control on the part of the
>> shareholders.
>> (b) Trustee may hold, manage, deal with, and dispose of the property and business of the
>> Trust in the same manner as if they were the absolute proprietors thereof, subject only
>> to the specific limitations herein placed on their powers. The enumeration of powers
>> contained herein shall not be construed as limiting in any way the general powers
>> hereby-conferred on Trustee. They shall have all powers necessary, convenient, or
>> appropriate to the purposes and ends of this Trust, and are authorized to take any
>> action, which they deed property to carry out such purposes.
>> (c) Trustee shall have the powers, amount others, to purchase or otherwise acquire
>> property, and to sell, exchange, lease, mortgage, pledge, or in any manner dispose,
>> encumber, improve, or deal with the property of the Trust, or any part thereof or any
>> interest therein, on such terms and for such consideration and purposes as they deem
>> proper.
>> (d) Trustee shall have the power to loan money in their control as Trustee, with or
>> without security, on such terms as they deem expedient. Trustee may engage in
>> business, manufacture, and deal in good, wares, and merchandise, incur indebtedness,
>> borrow or loan money with or without security, enter into contracts of all kinds,
>> without exception.
>> (e) Trustee may sue and be sued and prosecute and defend any and all actions affecting
>> the Trust or its business or property, either in the name of the Trust or in their own
>> names; they may adopt and enforce such bylaws or rules and regulations, not
>> inconsistent with the provisions of this instrument, as they may from time to time
>> deem expedient; they may adopt and use a common seal; they may vote in person or
>> by proxy and stock belonging to the Trust estate; and receive the dividends thereon.
>> The enumeration of specific duties and powers shall not be construed in any way as a
>> limitation on the general powers intended to be conferred on Trustee.
>>
>>
>>
>> Under the above provision it seems that if she "holds legal title" since she is the trustee, then maybe she should be entitled to the homestead because of that. Also, maybe she could just transfer the property into her name right now pursuant to the above section, but I was advised by a probate attorney who deals with trusts and invalid trusts that we would be wise to seek a court order before just making the transfer.
>>
>> Thoughts?
>>
>>
>>
>>
>>
>> Holly Roark
>>
>> Certified Bankruptcy Specialist*
>>
>> and Sports Lawyer
>>
>> holly@roarklawoffices.com **primary email address**
>>
>> www.roarklawoffices.com
>>
>> Central District of California
>>
>> Consumer Bankruptcy Attorney
>>
>> 1875 Century Park East, Suite 600
>>
>> Los Angeles, CA 90067
>>
>> T (310) 553-2600
>>
>> F (310) 553-2601
>>
>> *By State Bar of California Board of Legal Specialization
>>
>> **For a quicker response, email me at holly@roarklawoffices.com.
>>
>> I only use gmail for my listservs, and am likely to miss private emails
>>
>> directed to my gmail account.**
>>
>>
>>
>>
>>
>> On Wed, Jul 30, 2014 at 11:30 AM, 'Vernon L. Ellicott, Esq.' vle@vlelaw.com [cdcbaa] wrote:
>>
>>
>>
>> First question is, What does the trust itself say about dissolving or amending it?
>>
>>
>>
>> Vernon L. Ellicott, Esq.
>>
>> Certified Family Law Specialist
>>
>> California State Bar Board of Legal Specialization
>>
>> A Bankruptcy and Family Law Firm
>>
>> Law Offices of Vernon L. Ellicott
>>
>> 325 E. Hillcrest Drive, Suite 150
>>
>> Thousand Oaks, CA 91360-7799
>>
>> (805) 446-6262 Phone
>>
>> (661) 222-2922 Phone
>>
>> (805) 446-6264 Fax
>>
>>
>>
>>
>>
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>> A bad day on the bike is better than a good day on the golf course!
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>> Sent: Wednesday, July 30, 2014 11:13 AM
>> To: Strictly Bankruptcy Issues; cdcbaa
>> Subject: [cdcbaa] Chapter 13 case - I need to invalidate a trust and have the property titled in the rightful owner (debtor)
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>> Hotly contested case. Now in a chapter 13, converted from a 7. I need to invalidate a trust and have the property titled in the rightful owner (debtor) so she can take the homestead. Homestead is contested because the house is titled in the name of a "business trust" and the argument against the homestead is that the debtor only owns shares in the trust.
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>> We want to record the transfer documents to put the house back into her name, but I think we need an order invalidating the "business trust".
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>> It seems this would be done as an AP rather than a motion as it's esentially to determine the Debtor's interest in the property.
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>> Does anyone have a sample of what such an action would look like, or something similar?
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>> Debtor is beneficiary and trustee of the trust, but NOT the trustor. The trustor is a straw person who never owned the property that is the res of the trust. The trust is a sham, but I need to prove all this and get the house titled in the Debtor's name. We've declared the homestead, of course, on schedule C, but have multiple parties objecting to it because of this business trust.
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>> Help! Need samples, even if they are from probate court or somewhere else. I just need to invalidate this trust and show that the debtor is the rightful owner. Thanks.
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>> Holly Roark
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>> Certified Bankruptcy Specialist*
>>
>> and Sports Lawyer
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>> holly@roarklawoffices.com **primary email address**
>>
>> www.roarklawoffices.com
>>
>> Central District of California
>>
>> Consumer Bankruptcy Attorney
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>> 1875 Century Park East, Suite 600
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>> Los Angeles, CA 90067
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>> T (310) 553-2600
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>> F (310) 553-2601
>>
>> *By State Bar of California Board of Legal Specialization
>>
>> **For a quicker response, email me at holly@roarklawoffices.com.
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>> I only use gmail for my listservs, and am likely to miss private emails
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>> directed to my gmail account.**
>>
>
>

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This is not a probate trust because a business trust is excluded as a trust under the probate code s82. I think Holly is describing a Massachusetts trust; which some people inappropriately use for 1) asset protection and or 2) tax avoidance. The trust sounds a bit dodgy. A simple deed transfer would have to be disclosed and I would anticipate some fraudulent transfer questions; at the minimum the transfer would not be the same as probate trust transfer because there is a change in entity ownership. The Los Angeles assessor has been going after these trusts.
I think Holly said the trustor never owned the property, so presumptively the trustee purchased the property and holds legal title and the beneficiary has equitable title; but trustee and the beneficiary are the same person so. . . . I think the tax dodge is avoiding the minimum corp/LLC tax. She is trying to claim a homestead so there is no income issue. Apparently the bankruptcy trustee is saying business trust is a business entity [which it is] and not a probate trust; therefore it is not the debtors property and you cant exempt property you dont own.
Maybe a petition to determine ownership would solve the problem. But there would be a lot of questions to answer on the way.
Best regards
Larry Webb
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California Board of Legal Specialization
Certified Specialist in Bankruptcy Law
State Bar of California 229344
Central District California
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Law Offices of Larry Webb
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