Personal Trust as Property of Bankruptcy Estate
Posted: Wed Jun 03, 2009 10:22 am
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Facts:
Trust was written in 1995.
Settlor is not the Trustee and is specifically excluded from becoming a
Trustee.
Settlor is not a beneficiary.
Trust says NO distributions to Settlor - no exceptions.
Trust says NO distributions during Settlor's lifetime.
Settlor has filed a bankruptcy case in 2009.
Unknown:
The date of contribution of assets to the trust. Assume for this discussion
that there have been no transfers to the trust for more than 7 years.
Question:
Are the trust assets property of the bankruptcy estate?
Sub-question 1: Is this a question of fraudulent transfer law because, if
so, the statute of limitations has run long ago.
Sub-question 2: Did debtor sufficient divest himself of assets such that
this was equivalent to an absolute gift in 1995, 1996.
Sub-question 3: What is the Probate or Civil Code section which specifically
deals with self-settled trusts.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
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Message
Facts:
Trust was written in
1995.
Settlor is not the Trustee
and is specifically excluded from becoming a Trustee.
Settlor is not a
beneficiary.
Trust says NO distributions
to Settlor - no exceptions.
Trust says NO distributions
during Settlor's lifetime.
Settlor has filed a
bankruptcy case in 2009.
Unknown:
The date of contribution of assets to the
trust. Assume for this discussion that there have been no transfers
to the trust for more than 7 years.
Question:
Are the trust assets property of thebankruptcy estate?
Sub-question 1: Is this a question offraudulent transfer law because, if so, the statute of limitations has run long
ago.
Sub-question 2: Did debtor sufficient divest
himself of assets such that this was equivalent to an absolute gift in 1995,
1996.
Sub-question 3: What is the Probate or Civil
Code section which specifically deals with self-settled
trusts.
David A.
Tilem
Certified Bankruptcy
Specialist*
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