Inheritance during 3rd year of 5 year plan

[VeganMan]

We filed in 2005, 3 days before the current law was signed. It was a fantastic plan: $50 payments on debts totalling over $100,000.

3 years into our 5 year plan my mother in law passed away. My wife is the beneficiary to over $30000 in IRA's and Life Insurance that are part of a trust in her (my late mother in law's) name.

Our attorney wants to ammend our Schedule B (Item 20) where "Contingent and noncontingent interests in estate of a decedent, death benefit plan, life insurance policy, or trust" are supposed to be listed to show our interest in these IRA's and Life Insurance.

My question is this: If we had listed the IRA's and Life Insurance to which my wife is beneficiary as our attorney is now ammending "Schedule B" to show; would our current situation be any different?

In the event a relative chooses "the wrong year to die", does listing such "interest" in a trust or estate in advance spare you the nightmare of having to turn it over to the trustee?

[HHM]

Nope, the the BK law is very harsh on this situation and even I don't really understand why?

You need to list it; the BK estate already contains any interest in any inheritance or life insurance proceeds the debtor may receive. In the chapter 7 scenario, the trustee can grab inheritance up to 180 days after the case is filed, in a chapter 13 scenario, the inheritance is at risk for the life of the chapter 13 plan.

The key here is what exactly are the benefits and how are they held. If its and IRA, you need to see a financial professional about rolling that into an IRA that would be exempt, etc.