Inheritance and Bankruptcy mn

June 1st, 2007 by Questions

I am mid-way to completion in my bankruptcy with a trustee, and I am only now informed that there is some money coming to me from a trust, the amount would be about half of the dept. This trust was left to my father’s estate, to his descendents. After the executrix, a family member, told me of this unexpected trust I felt that ethically I must also tell her that I am mid-way through an active bankruptcy and am legally responsible to declare this wind fall to the trustee. Question, does the executrix have the power of attorney through her notary to hold funds from me or for me and make alternative arrangements within the law, at her discretion. Though my name is on a list of names in this trust can the executrix override, the decision to either exclude or direct my share of the funds to another of my siblings for example, or by her own discretion, close the trust after my bankruptcy is discharged. Are any of these options legal, that would or could justify the executrix making any of these decisions. Am I legally permitted to refuse the funds, or to have my portion directed to my sibling who is also listed in the trust fund. Thanks for this free service, it is much appreciated, as this issues can be very alarming when in ignorance of the law. mn

Questions

One Response to “Inheritance and Bankruptcy mn”


, Barton Goth GCO Bankruptcy Trustees said:

Before I answer I want you to know I am not a lawyer and therefore have never received any training with respect to wills and other estate issues and many of the questions you have asked would be better asked of a lawyer who practices actively in this area.

However, based on experience, I can tell you this:

1. You have a legal obligation to inform your trustee, failure to do so would be considered a bankruptcy offense and may result in ineligibly for discharge.

2. This inheritance is considered after acquired property and is property of the bankruptcy estate and the trustee will have to take measures to ensure the moneys ultimately are distributed as prescribed by the Bankruptcy and Insolvency Act.

3. Simply having the executor delay paying out the proceeds still will have no bearing on who receives the funds. Your trustee will be obligated to ensure all these monies are collected prior to you be eligible for discharge.

The best thing to do in this situation is to simply contact you trustee directly and inform them what has taken place. If your open an honest about things then you can ensure your actions are not going to create more difficulties.

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