Property Inheritance Ch 13

[dovette7]

I am in Ch 13 for 60 months... been paying for 16 months.
I was talking to my dad tonight and he told me how his will is set up. My brother gets 33%, I get 33% and his wife gets 34% of everything. That includes money and property. When I filed, I told him all about our bankruptcy and told him to put my part of any inheritance in a trust for a later date or in my kids names, but he did not do it.

I know that any money I recieve will go to trustee. But what happens to the property. The property has been in our family for decades and is the old home place of my great grandparents. Can my step mother and brother be forced to sell property if I own 33% of it? My dad said they couldn't be forced to sell it, but I have no clue. I wish he would've just left my name off of everything for right now. He's in good health and hopefully I won't have to deal with any of this, but just in case, I want everything to be protected.

Any knowledge out there on this?

[AngelinaCatHub]

By law, you are not compelled to take an inheritance. You can refuse it from the estate. Now let’s put it this way, if your brother and Mom wish, they could take your portion as it would go to them, and give it to you later. Another way is donate it to a Charitable Remainder Unitrust Known as a CRUT. Here is how that works, the Trust belongs to a named charity organization, however by law, you have to take at least 5% from the CRUT per year. You may take more as long as your life projection leaves (in theory) 10%. You do not pay inheritance taxes or Income taxes as it belongs to the charity upon your death. You may have your spouse as a coTrustee and the survivor will have it until he dies. You will have to consult with an estate lawyer for details on this. ‘Hub

[Flamingo]

If your father should pass away while you are in your Chapter 13 (you have just under 4 years to go in your Plan), your trustee will be highly interested in at least part of your inheritance. Your father could do a Codicil to his will putting your portion in your childrens' names or in your brother's name until you are out of BK and he can again either redo his will or amend it again at that time. Just as in a lot of things, you are weighing odds of your father possibly passing away during the next almost 4 years - probably won't happen if your father is in good health but it is a risk that you take.

I suggest you have a talk with your Chapter 13 attorney about the situation to put your mind at ease or get some ideas as to how to handle your situation or call the attorney who handled your father's will and explain the situation and see if he suggests that your father revise his will.

[keepmine]

This is not correct as it pretains to bk. An inheritence within 180 days of your filing date is the property of the bk estate. Does not matter if you refuse to accept it or not. The trustee has the authority to step in and seize it for the bk estate.

[AngelinaCatHub]

I stand corrected, however, if Dad wants to change his will, it is Dad's business and should not be the bk problems, unless Dad passes, and then the son attempts to divert it into a Trust. I cannot see how the bk can own another persons wish to change his will. We were very fortunate in that when we had plenty of money, we gifted our farm with life estate to the State of Florida. They cannot take a gift so we got a small stypend that we put into the CRUT. Merrill Lynche put it into an annuity ergo it is not touchable by bk as insurance or insurance proceeds from an annuity is not attachable. Please correct me if I'm wrong. I was wrong once last year too. LOL 'Hub

[keepmine]

People are free to change their will at any time.
The problem will be if the OP's father passes during the pendancy of the bk case and the will specifically names the Op as a beneficary.

[dovette7]

I do understand that if my Dad changes his will, that is up to him. I also know that if I were to inherit any money the trustee could and more than likely would keep it to pay into my plan. But what about property?

Could they take the property I would get and sell it? Or since I'm in a Ch 13, would I get to keep the property? And if there are 2 other owners of the property how does that work if they could sell it?

[Flamingo]

I highly suggest you discuss this with your attorney to get the answers you need as to the inheritance laws in the state in which you reside. Any inheritance you receive during your Chapter 13 falls under the control of your trustee since it increases your assets and your disposable income. Your financial estate from the time you file until the date of discharge is under the control of your trustee. Your assets would increase upon receiving a portion of your father's house and your disposable income increase if you receive cash in hand.

[woeisme]

If you find out the answer to this question about the property dovett, I would be really interested in you posting it because I also wonder about this. My Mom is in her mid-70's and I have 4 more years of my CH 13, which I haven't told anyone in my family about. She doesn't have a lot other than her house, which she lives in with my brother who is in his early 50's who is partially disabled (had a stroke and he now limps and has limited movement on his right side, plus speech problems, so he is living off of SSI disability.) I've asked her in the past to take me out of the will (before we file BK) because I would rather that the house go to my brother since he is the one living in it with her, but she thinks that would be "unfair" to me and my other siblings, and I can't change her mind on it. I also would hate it if the house had to be sold out from under him to satisfy the trustee to get my 1/6th interest in it if anything happens to her while I'm in BK, but since it's only a "maybe, what if?" scenario, haven't asked my lawyer about it.

[Flamingo]

If you find out the answer to this question about the property dovett, I would be really interested in you posting it because I also wonder about this. My Mom is in her mid-70's and I have 4 more years of my CH 13, which I haven't told anyone in my family about. She doesn't have a lot other than her house, which she lives in with my brother who is in his early 50's who is partially disabled (had a stroke and he now limps and has limited movement on his right side, plus speech problems, so he is living off of SSI disability.) I've asked her in the past to take me out of the will (before we file BK) because I would rather that the house go to my brother since he is the one living in it with her, but she thinks that would be "unfair" to me and my other siblings, and I can't change her mind on it. I also would hate it if the house had to be sold out from under him to satisfy the trustee to get my 1/6th interest in it if anything happens to her while I'm in BK, but since it's only a "maybe, what if?" scenario, haven't asked my lawyer about it.

We had an inheritance issue as to my father-in-law's estate less than two years after we filed. He passed the house on to my husband and his brother, his two surviving children since my MIL passed away in 1998. The house had to be sold to pay debts and my niece wanted to purchase the house. At the end, the Trustee took a portion of the balance left after payment of mortgage, debts, etc. One just needs to educate themselves if in Chapter 13 if a loved one passes away and they are in that Will. No one knows if that person will pass away during your Chapter 13 but if they do, you should educate yourselves on the inheritance laws in your state and consult with your Chapter 13 attorney in the event they do pass away. It can be complicated especially if there are other siblings or relatives inheriting. All inheritances are required to be reported to your Trustee during your Plan just as if you win the lottery, etc., anything that increases your assets or disposable income. Not do so so risks the dismissal of your Chapter 13 which is something you just don't want to have occur.

[woeisme]

Thanks Flamingo. I hope I don't have to cross that bridge, since I want my Mom to live many many more years (both her parents lived well into their late 80's, so it's not unrealistic) and I don't know what to do about it anyway. My Mom refused to change her will a few years ago when I asked her to for the sake of my brother, so if she won't do it for his sake, I don't see her doing it for the sake of my BK filing. Her rationale is that he wouldn't be able to take care of the house without her there and would need to move anyway, so just figures we will sell the house after she passes away anyhow, and if it was left to my brother alone it would actually complicate things for him since there is a limit to how many assets someone getting SSI can own, and if it was in his name alone and he had to sell it because he couldn't maintain it, that the entire amount would go to the government. I don't know the SSI rules so don't know if she's right on that or not, but she was getting so upset with me talking about her death that I had to let it go. But I did say that if SSI would take his portion of any inheritance, then she should leave him out of the will and have my sister (who is the executor) get an "extra" share that she could then use to help provide for my brother so he didn't get totally left out, and she wouldn't go for that either. (My sister is totally trustworthy, so it's not that my Mom is worried that my sister would just pocket the extra share, because my sister has also asked my Mom to be left out of the will several times and have her share go to my disabled brother, and my sis has quite a lot of $ of her own so her 1/6th of the house would be pocket change to her anyhow.) In my Mom's head, the only fair thing is splitting things evenly, regardless of differences in individual needs or circumstances, and if it means my brother gets nothing after SSI takes his share or I get nothing after the trustee gets his share, then that's just the way it goes. The house is a dump really, probably be lucky to sell it for 50K given its condition and location, and she doesn't really have much beyond the house, lives off of social security and a small pension. Really more concerned with what will happen to my brother after she passes away, since he's a real jacka$$, which I know is mean to say about a disabled person, but he was a total jerk before the stroke and now makes my Mom miserable, and there's just too much bad history between us so no way in the world would I let him live with me, I'd be suicidal in a month, and I know my other 4 siblings feel the same way about him, so I really don't know what will happen to him or where he will live or anything. But I guess I've really drifted off subject here.

Don't worry, I don't plan to ever do anything to put my CH 13 in jepordy, if the trustee wants my 1/6th interest in this house if anything, god forbid, happens to my Mom in the next 4 years, he can have it. If that day comes, I guess I'll contact my lawyer and see what the laws are and if I can refuse the inheritince and make it my siblings problem... but if not, I'll just do whatever I need to do to follow the BK law.