Are you considering bankruptcy? Do you have concerns about your assets? Can bankruptcy take your inheritance?
Here’s what you need to know:
The first thing to understand is that each state has a list of exemptions in bankruptcy. Not every state treats inheritance money the same. It’s important to understand the laws in your state so you know what will happen with any assets or income sources such as inheritance money. Your attorney will review your assets and explain how your state deals with inheritance money.
Protecting Inheritance with a Trust
One way to protect inheritance money from court seizure during bankruptcy proceedings is a trust or other form of asset protection plan before filing. This is something that must be done before filing. If you want to know more, you should work with an attorney who specializes in this type of law.
Setting up a trust ensures that your inheritance money goes where it needs to go as designated by yourself or the will-maker instead of being taken away by creditors through bankruptcy proceedings.
It’s also important to remember that just because someone leaves an inheritance does not mean they have forgiven any debt associated with them at the time of their death.
For example, if someone left an estate with debt attached, those creditors could still demand repayment. This is true even if the person who inherited does not have access to enough cash flow without going into debt themselves.
In this case, filing for bankruptcy might be necessary for the person who inherited not only the assets but also some debts from their deceased relatives or loved ones.
Role of the Trustee
The person who determines what and how your assets are used when you file for bankruptcy is the trustee.
A bankruptcy trustee is appointed by the court to oversee a debtor’s bankruptcy case. It is their job to make sure that creditors are treated fairly by federal bankruptcy laws. They are also responsible for ensuring that all of the debtor’s information is accurate and up-to-date throughout the filing process.
The primary responsibility of a bankruptcy trustee is to collect and manage all assets related to the case. This includes things like real estate, cars, bank accounts, investments, and any other property owned by the debtor. The trustee will then distribute these assets among creditors according to established priorities outlined in federal law to pay off debts. It is important to note that not all assets may be liquidated during this process—some may be held onto for future use by either party.
Filing for bankruptcy can be a difficult decision, especially if there are assets like an inheritance involved. However, understanding how various exemptions and trusts work when it comes to protecting those assets can make all the difference. It helps you decide whether or not filing for bankruptcy is right for your situation. Consult with experienced attorneys before making any decisions. This way, all of your bases are covered no matter what happens with your finances down the line.
For more information, contact the Law Offices of Robert M. Geller at 813-254-5696 to schedule a free consultation with an experienced attorney.