Should You Consider Bankruptcy
Bankruptcy is one option and may help in any of the above situations.
After a loved ones death, the last thing most people want is to lose the home that reminds them of their spouse, or face harassment from creditors during an already difficult time. Bankruptcy can stop both of those things from happening. Download my free report about stopping creditor harassment to find out more.
Still, not every situation will require bankruptcy.
How Can A Trustee Find Out About An Inheritance If I Dont Tell Them
Donât go into your bankruptcy trying to hide information from the trustee. Donât pretend that you can forget to tell them information. This will not end well for you.
You should assume that the trustee will find out about an inheritance or any other windfall that comes your way. This can happen in a couple different ways. Both bankruptcies and probate cases are part of the public record, so anybody can look up this information.
For example, the personal representative or the executor of the will could contact the trustee on their own. You may have a disgruntled relative who contacts your trustee because they were cut out of the will. The probate court itself could contact your trustee.
Long story short, trustees can and will find out about your inheritance. It will be much better, and probably cheaper, for you if they hear it from you first.
How Long Does Probate Take In Ontario
How long probate will take for probate Ontario varies depending on where in the province the departed person lived and exactly how complex the will and the estate is. In Ontario, and specifically in the Toronto area as a result of how backed up the courts are, it can take numerous months just to obtain the Certificate of Appointment. The procedure starts after the Estate Trustee files the request for probate with the court in Ontario.
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What Are The Ways To Avoid Probate Ontario For An Estate
To avoid probate Ontario, you need to ensure for your assets that can avoid probate, are either owned jointly with the person or individuals you wish to inherit them, or are named as a designated beneficiary.
The most reliable preparation strategy to employ prior to death to minimize probate tax is making use of twin wills. This is where assets that require probate pass under one will, and other property that regularly do not call for probate pass under a separate will.
Properties that can be omitted from probate Ontario are:
- Jointly held assets with a right of survivorship.
- RRSPs, RRIFs, TFSAs with a named beneficiary apart from Estate.
- The life insurance policy proceeds paid to a named recipient besides Estate.
- Real property owned outside of Ontario.
- Gifts to people made throughout your life.
Statement Of Affairs Section 244 Creditors Petition
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Our Bankruptcy Attorneys Can Help
Estate issues can get confusing, and if theres any doubt of what your options are, we encourage you to speak with an estate and/or bankruptcy attorney. Our bankruptcy lawyers in Memphis can help you figure out the best way to move forward; and we dont push people toward unnecessary bankruptcy if its not right for you.
In some cases, it might benefit you to consider bankruptcy as early as possible. Getting rid of the debt before a person has died can help protect the life insurance policy, for example.
Requests For Property From The Estate
For example, say your brother really wants to take your late fathers carafter all, its just sitting in the garage, not useful to anyone and in need of an oil change anyway. But youve just filed the papers to get the probate case started. Dont just tell your brother no; explain that at least until you get the estate inventoried and valued, you cant let anyone take anything. Its part of your fiduciary responsibility as executor; you are required by law to make sure theres enough money to pay the bills before you start giving out property to beneficiaries. If you can get your brother to understand that this isnt a personal rule, made by you and applied just to him, you have a much better shot at heading off hurt feelings. Contrary to scenes you might have seen enacted on television or in the movies, theres really no such thing as a reading of a will. Theres no legal requirement that a last will and testament must be read aloud to anyone. The executor or personal representative of the estate determines who is entitled to receive a copy and who should be sent a copy even if state law doesnt require it.
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Probate Ontario: Properties Debts Estate Trustee Rules And More
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When Exactly Will A Bankruptcy Trustee Choose To Sell A Debtors Property
However, not all assets will be sold by a trustee. Specifically, a debtor is allowed to retain some assets up to a certain value, which are referred to as exemptions.
Accordingly, before a trustee decides to sell estate property, they will generally consider the value of the property less any costs of sale, less any encumbrances less any exemptions.
Usually, a debtor has claimed a homestead exemption of $300,000 to $600,000 under California law.; As of January 1, 2021, the increased automatic homestead exemption under California state law;allows a debtor to claim up to a specific amount, determined by the debtors circumstances, of their equity as exempt. Cal. Code Civ. Proc. § 704.730-.
The trustee sells all other assets, which are nonexempt, for the purpose of; paying unsecured creditors. 11 U.S.C. § 363. If, after the application of the proper homestead exemption, the remaining unencumbered equity in a debtors house exceeds the cost of selling the house, then the trustee will likely sell the property in order to pay the unsecured creditors. This means that the trustee may be able to sell your home by simply paying you the homestead.
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How Does Bankruptcy Typically Impact An Inheritance
There are two ways bankruptcy can affect an inheritance. One would is if the deceased was in the process of filing a bankruptcy. The second is if one of the beneficiaries is in bankruptcy or had a recent bankruptcy. If the deceased was in the process of a chapter 7 bankruptcy, if bankruptcy had been filed but the discharge judgment had not yet been entered, it probably would just continue on. Its really the same process as the estate distribution process. One significant difference is that some of the exempt assets may no longer be exempt, once the person is deceased. One would probably have to go to the bankruptcy court and appear before the judge to distribute those exempt assets through the estate.
If its a Chapter 13 bankruptcy, its much more complicated because the idea of chapter 13 is that the debtor will pay off those debts over time. Now that the debtor is deceased, there probably are not going to be any future earnings. If there are estate assets that generate income, even after the debtor dies, and that income is sufficient to meet the obligations of the Chapter 13 bankruptcy, then it may be able to continue through the three to five-year process that those take. After that process is finished, the probate estate would be able to close and distribute the remainder to the beneficiaries.
How Can I Properly Plan My Estate To Protect My Assets By Bankruptcy Filed By My Heirs?
What Happens To My Estate If I Am In Bankruptcy When I Die
A will enables you to leave specific instructions about who you would like to receive your money and property and how you would like for it to be given away when you die. However, your debts must be paid before your beneficiaries will receive a dime. As a result, if you are in bankruptcy when you pass away, your beneficiaries will receive only what is left of your life savings and property when the bankruptcy case concludes.
Individual debtors typically file for Chapter 7 or Chapter 13 bankruptcy. If you pass away during a Chapter 7 bankruptcy, the bankruptcy case will proceed without much of an interruption because your direct participation is very limited. The bankruptcy trustee will sell your property to obtain cash that can be used to pay off your creditors . At the conclusion of the bankruptcy case, any remaining money or property can go through the probate process and be transferred to the beneficiaries of your will.
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Probate Ontario: What Does An Estate Trustee Have To Disclose To Beneficiaries
A well-written will is the cornerstone of proper estate administration. The Estate Trustee is the one who oversees the distribution of the estate. In his/her function, the person in charge of the estate must manage a number of legal and financial issues. The Estate Trustee should be neutral and act in an impartial way to all stakeholders, especially the beneficiaries.
The Estate Trustee is well advised to report on a regular basis, preferably in writing, to the beneficiaries to ensure that they will be up to date on all issues of significance. For instance, beneficiaries need to understand the extent of the estates debts. They also must be told of any kind of litigation the estate is or might about to be associated with. This is specifically so if that implies a loss of value of the assets to reduce the estates worth. Nothing good will come from surprising the beneficiaries. Especially if it is bad news about a reduction of value in what they expected from the estate.
We Can Help You Plan Ahead
It is impossible to know what the future holds. Those who are prospering today may encounter severe money problems tomorrow. It is crucial not to wait until you or your family members or loved ones are experiencing financial troubles, or even the prospect of bankruptcy, to take action to protect your life savings, heirlooms, and other property you have worked so hard to accumulate. We can design an estate plan that will help protect your property and money and your children or loved ones inheritance.
Call Allison Kierman at 480.719.7333 or visit Kierman Law, PLC at;www.kiermanlaw.com today to create or update your estate plan to ensure that your property is protected from creditors claimswhether or not you or a loved one eventually files for bankruptcy.
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Your Duties As A Debtor In Bankruptcy
If you receive an inheritance during the 180-day post-petition window after filing your Chapter 7 bankruptcy, youâll have to amend the forms. Youâll need to show that this money is now part of your bankruptcy estate.
It doesnât matter if the money comes to you the next day, or if the property is tied up in probate court for months or even years. Even if you donât see the money until well after your bankruptcy case is done, if the person who leaves you something passed away during that 180-day post-petition period, this is not your money. That money belongs to the bankruptcy estate.
Youâll need to file an amended Schedule A/B with the bankruptcy court listing the inheritance. You might be able to keep some or all of the money through a wildcard exemption, depending on the size of the inheritance and your stateâs laws about bankruptcy exceptions. If youâre having trouble with this paperwork, a bankruptcy attorney can help you sort it out.
If nothing else, the bankruptcy trustee will need the contact information for the personal representative named in the will, sometimes known as the executor of the will.
When An Inheritance Gets Entangled In A Bankruptcy Proceeding Smart Estate Planning Can Help
Foster Swift Finance Real Estate & Bankruptcy Law News
The purpose of bankruptcy is twofold: to provide the party filing for bankruptcythe debtorwith a fresh start, and to fairly distribute the debtors non-exempt assets to creditors in accordance with the priority scheme set forth in the U.S. Bankruptcy Code. This may sound relatively simple, but accomplishing these dual objectives can be difficult. One of the challenges in all bankruptcy cases is determining the scope and extent of assets that constitute property of the estate which are available for distribution to creditors.
The purpose of this article is to explore some aspects of the intersection between inheritance and bankruptcy; specifically, what happens when a debtor receives assets from a decedent. It is an issue that has been analyzed by many courts, and the outcome depends on many factors, including the timing and nature of such transfers. Three scenarios in which these issues arise, each of which is addressed in detail below, include:
- Payable on Death Accounts
- Pre-Petition Inheritance and Bequests
- Post-Petition Inheritance and Bequests
However, before diving in to explore how each of these scenarios are treated in bankruptcy, its important to understand how an estatethat is, the property available for distribution to creditorsis created in bankruptcy.
Property of the Estate
Payable on Death Accounts
Prepetition Inheritances and Bequests
Postpetition Inheritance and Bequests
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Can An Executor Of An Estate File For Bankruptcy
When a family member dies, her personal assets, real estate, trusts, and her debt fall into a newly formed entity called the decedents estate. ;This is a loose term that does not necessarily require probate of a will or an estate of millions of dollars.
Some estates are probated and some are not. ;However, those who stand to inherit from the deceased relative are called beneficiaries of the estate.
Lets assume that a piece of real estate property is being foreclosed when the owner dies. ;If you are a beneficiary of the deceaseds estate, and stand to inherit all or part of the property being foreclosed, who can file a Bankruptcy on the deceaseds behalf in order to stop the foreclosure proceedings?
Under Bankruptcy Code 11 U.S.C. Section 109, only an individual can file a Chapter 13 Bankruptcy case. ;Therefore, the estate of the deceased cannot file a Bankruptcy case, and an Executor or Administrator on behalf of the decedents estate cannot file a Bankruptcy.
However, since beneficiaries stand to inherit the property, and the property is subject to a mortgage and a foreclosure, ;a beneficiary would be eligible to file a Bankruptcy case and stop a foreclosure sale .
If you are in a difficult financial situation and require the services of an experienced bankruptcy attorney, contact the Law Offices of Allen A. Kolber, Esq. today to schedule a consultation and discuss your options.;
When You File For Bankruptcy Your Property Goes Into An Estate That’s Managed By The Bankruptcy Trustee
By Cara O’Neill, Attorney
All of the property you own when you file for bankruptcy, except for most pensions and educational trusts, become part of what is known as your “estate” when you file for bankruptcy. The bankruptcy trusteethe official responsible for overseeing your matterwill assume control of the property in your bankruptcy estate throughout your case.
The following assets will be part of your bankruptcy estate:
- property in your possession
- property in someone else’s possession
- property you’ve recently given away
- property you haven’t yet received but are entitled to
- proceeds from your property
- certain assets you receive within 180 days after filing , and
- your share of marital property.
However, filing for bankruptcy doesn’t mean that you’ll lose all of your property. You’ll be able to protect the assets that you’ll need to maintain a job and household. But it’s not up to you to choose the property that you’ll keepit’s up to your state.
To determine the type and amount of property that you’ll be allowed to exempt , you’ll look to your state’s exemption rules. They’ll set forth what you’ll be entitled to keep.
What will happen to assets that you can’t exempt will depend on the bankruptcy chapter that you file. If you’re interested in learning more about nonexempt property, you can find out by reading What Is Nonexempt Property in Bankruptcy?
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How Does Death Affect Debts
When people die, their debts are not passed on to their heirs unless it was a joint debt. It is still essential to determine what will happen to the bankruptcy after the debtor’s death. Why? Creditors can always look to the deceased debtor’s estate and property to satisfy the debtor’s obligations, which will decrease the amount received by heirs.
Find out more about estates and the probate process.