CALL NOW!
FREE PHONE/VIRTUAL CONSULTATION

Tampa Bankruptcy Filings and Assets in a Trust

A probate estate and a bankruptcy estate are two very different estates with very different rules for asset inclusion, and assets included in one could have an effect on the other. Take the example of a trust: being the beneficiary of one does not mean that finances are never an issue. Take a situation where an individual is the beneficiary of an educational trust, but what if they run into an unexpected situation involving large medical bills? Could the trust actually affect their ability to file or could the assets be included in the bankruptcy estate?

The answer to this question is of course not a yes or no answer but one that is dependent on individual circumstances and the specific terms of the trust. This is why consulting an experienced bankruptcy attorney when considering bankruptcy is vitally important, and so is working with one when creating a trust. While there is not a definite yes or no answer to the question, there are some general things to know.

The first is that the ownership interest is a large determinant of whether trust assets can be pulled into the bankruptcy estate. There are two basic kinds of trusts: revocable and irrevocable. Let’s start with irrevocable because ownership lies with the beneficiary. The assets have already been definitively transferred into the trust. A revocable trust is one in which the grantor retains the right to make changes.

How does the irrevocable and revocable nature of a trust affect bankruptcy? If a grantor retains the ability to take an asset back, the beneficiary’s interest is only an expectant one. The beneficiary doesn’t own the assets for them to be included in a bankruptcy estate determined upon assets owned by the debtor.

Another very important term to look for in a trust is whether there is a spendthrift provision. This type of provision helps protect individuals by limiting creditors’ access to the assets included in the trust.

Source:Fox Business, “Is a Trust Untouchable in Bankruptcy?” Justin Harelik, April 9, 2013

If you have questions about how a trust could affect your consumer bankruptcy case, our Tampa bankruptcy team has answers. Visit our website to learn more.

Archive

Video Testimonials

Tampa Bankruptcy Law Blog

Can Leading a Frugal Lifestyle Prevent a Second Bankruptcy?

Changing your approach to spending is a necessity after bankruptcy. You’ll turn over some control of your finances to the...
Read More

Are Medical Issues Forcing You Into Bankruptcy?

Many Americans wind up in debt because of medical bills. One of the most common reasons for filing bankruptcy in...
Read More

Law Offices of Robert M. Geller, P.A. Congratulates Danielle Austin For Receiving the Patriot Award from the United States Department of Defense

Award Recognizes Support of Guard and Reserve Members Who Work for the Organization Tampa, Florida, June 29, 2021 – The...
Read More

Is Your 401k or Other Retirement Savings at Risk in Bankruptcy’s Liquidation of Assets?

If you’ve spent years saving for retirement, putting that money at risk when you file for bankruptcy is likely one...
Read More

Tips to Help You Protect Your Assets When You File for Bankruptcy

One of the most intimidating aspects of filing for bankruptcy is protecting your assets. Worrying about whether bankruptcy puts their...
Read More

How Does Bankruptcy Affect Vehicle Ownership? What Assets Can You Keep through the Bankruptcy Process and Does It Affect Your Car?

Many people struggling financially avoid filing for bankruptcy because of concerns about losing important assets like their vehicles. The good...
Read More

Is There a Legal Way to Hide Assets When You File for Bankruptcy?

Filing for bankruptcy can be an overwhelming experience. The relief you receive when you file helps you feel better about...
Read More

Do Bankruptcy Trustees Take Your Savings? What is Considered an Asset in Bankruptcy and How Does It Affect the Money You’ve Saved?

Bankruptcy trustees gain access to a variety of your assets when you file. But what is considered an asset in...
Read More

Can Filing for Bankruptcy Help You Protect Your House?

fiHow filing for bankruptcy affects your home is one of the greatest concerns people have when they consult with bankruptcy...
Read More

Should I Refinance a Student Loan I Can’t Discharge in Bankruptcy?

Student loan debt is overwhelming many people. Could refinancing be the answer to help you avoid bankruptcy if your student...
Read More

Bankruptcy

For The Next 5 Days GET A FREE BOOK About Bankruptcy

Learn More

Infographics

We are A Debt Relief Agency.
We help people file for bankruptcy under the Bankruptcy Code

Pay Online Bankruptcy Courses Newsletter Subscription

NACBA Logo avvo1 avvo2 avvo3 LEA BBB Logo RG Seal

Call For A Free Initial Consultation

813.254.5696

Tampa Office

Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
T: (800) 853-7549
F: (813) 253-3405

Map And Directions

St. Petersburg Office

Law Offices of Robert M. Geller, P.A.
125 5th Street South
(Wells Fargo Financial Center)
2nd Floor, Suite G
St. Petersburg, FL 33701
T: (727) 532-3939

Map And Directions

Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320

Map And Directions