$10,000 Gift - what to do?

[sunnysiderays]

I have a different problem... I have a grandmother that wants to gift me a check of $10,000 and I do not want to take it. I been putting her off. What do I do? If I do take it, I do not want it to show in my bank account. I rather she keep it and give to me in 5 years when the bK is over.

[lrprn]

(SSR, I moved your question here into its own thread. You'll get better answers this way and also so you won't hijack the original poster's thread. -lrprn)

Couple of questions first....does your grandmother know you've filed Ch 13? If she doesn't, how do you feel about telling her so she understands why you don't want to take $10K in cash now and possibly lose it to your trustee but would be more than happy to take it after your Ch 13 is over?

If you don't want to tell her, would she be willing set up the money for you in a protected trust to come to you in, say, five years from now?

[laurannm]

Why not just take the check and cash it, and keep it locked up in your house? I know it's generally not a good idea to keep that kind of cash lying around, but I think I would purchase a little lock box or safe and keep it stashed away in my closet or something

[Minnymouth]

Laurannm,

FIRST - it's dishonest to not report that you received a gift of $10,000.

Second - it's traceable, so the Trustee could very well find it.

Third - not reporting it could get your case dismissed and then you would loose everything. Your gift, your ability to discharge all your debts, and you would owe everything just like before with "no way out" for the future.

Please do not encourage other members to be dishonest or try to hide things during their bankruptcy. It will only create problems for them they don't want or need.

As for what the member can do about the gift, all he has to do is explain that at the present time his grandmother needs to set it up in a trust fund available to them at a certain age AFTER their Chapter 13 is over. Otherwise, the gift is at the disposal of the Trustee to seize and to apply to the members debts. She can also leave it in a Trust in her Will with the statement they cannot have it till they reach a certain age. (after their Chapter 13 is finished and over.)

It would be a shame to have the grandmothers "good intentions" go to the creditors.

The member may have to swallow their pride and explain to the grandmother that they are in Chapter 13 or have her set it up so they have it in Trust or an IRA towards their retirement (as retirement funds are exempt mostly).

There are many ways to set it up so they do not have access too it until after their Chapter 13 is over and done with.

[laurannm]

My apologies, I wasn't aware that something like that would be serious enough to be cause for dismissal. If that is the case then I definitely do NOT encourage to take the check until after you have been discharged.

[tofargone]

Another suggestion, at least what I would do.

1. Cash the check at your grandmothers bank. Basically it is as close to untraceable as can be.

Now depending on your trustee and what they are requiring you can either use the cash for your daily expenses or funnel it into your bank account slowley.

Mine doesn't want bank statements, tax returns, nothing.

I know this is a legal grey area ( I have never heard of a trustee saying you need to tell him you received a gift, only increased income, inhearatence or winnings.) but basically they set up chapter 13s to be as painful as possible, you basically now have a way that you can live a decent life without stressing about all of the little things that will poke up at you during your time in debtors prison.

Now remember, this is what I would do, you have to walk your own path.

Good luck

[bkdone]

Have grandma put the money into a CD for you. She could put it under her name, or in trust for you. The maturity date is likely to be after you are discharged and you can cash it out and get the extra interest that comes with it. I dont know all the details about it, but its an idea.

She could also put the money into a savings account and list you as an authorized user...not a co-owner of the account...an authorized user (so you'd legally have access to the money.) Then, you can get to it to do whatever you need to without anyone knowing about it. Technically its not your account.

But, of course... I dont want you to get into trouble or mess up your discharge. I'm just thinking out loud. You are lucky you have a grandma...mine both died before I was born. The money is a bonus, but grandma is the true gift in this case! Enjoy her.

[wayne-o]

You could have your grandmother give the money to me and Ill hold it for you......I promise...
hehe.. No all kidding aside...if there is anyway to convince your grandmother to wait with her generous gift it would be best. The CD sounds like a good idea, but whatever you do, discuss the action and the ramifications with your attorney. good luck

[Flamingo]

Custodial accounts are assets during a Chapter 13 unless there is specific verbiage that the money is payable at such and such an age after the ending of the Plan. If it is accessible during the Plan period, it is an asset. Tell your grandmom about your BK. She needs to either (1) not give you the money, (2) keep it in her savings for you until your Plan is over, or (3) have her put the money in a trust account made payable to you at a certain age beyond the end of your BK. In your situation, have her consult an attorney as to the wording needed for that account.

[sunnysiderays]

Thank you ALL for your input. Thank you, lrprn for redirecting my post to the proper channels. My grandmother knows about the BK. She thought she was "just helping". I asked not to give me any check or cash. I want to stay as honest with my trustee 100% ALWAYS! The last thing I want is a dismiss of my BK13. YIKES!! That is a scary thought.

I have thought of all the ideas over & over and just do not see a honest way around it, but just not to take it at all. I never thought I would ever turned down money gifted to me. But I did!

My BK has been a very humbling experience to me so far. The way I spend, live and cope in everday life. I am doing ok and mannaging just fine as along as nothing major happens that will cost.

[tofargone]

Just a note, I talked to my lawyer today and brought up this scenerio, now mind you I have a very flexible trustee. But according to my attorney a gift of under 12K is not considered income. It is not taxed by the gifter or the gifty. ( bad spelling ) basically the only way a trustee would find out is through bank statements. He also said at least in my plan it only states I have to report extra income to the trustee and again a gift is not income. I will probably never have this "problem", but at least if I ever do I know now what I would do.

[cubfan300]

Do you have kids? She could give them the gift with the intention of giving it to you.

[jgarton244]

I would ask my trustee. I would send a letter stating that you have a relative that would like to gift you $10k, but with the stipulation that the money is not to be subject to paying additional BK debt. State that if the money is to go towards the debt, then the gift will not be given. Hopefullly, the trustee would give you permission to accept the gift, in writing, with no claims on the gift to be made by the BK court or trustee.

You can only be told no by the trustee, but you may also get permission. You never know unless you ask.