Can I get my name taken off the stock, or my mother just cashes it out without any ramifications? 9 Answers as of October 26, 2016

I will be filling for bankruptcy chapter 7 in a couple of weeks. My mother had put my name on some stock after my father passed away so it could be used for unpaid debts, funeral cost etc. after she passes. Now, I find that my creditors will be able to take that stock money, approximately $85,000 because my name is on it as a co-owner.

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OlsenDaines | Rex Daines
It depends on whose money it is. The correct way to have done it is for your mom to set up a trust, but that did not happen and now the transaction looks like it was a gift from your mom and the court-appointed trustee will want to take most of that money to pay your debts. You need to discuss this with an experienced bankruptcy attorney. There is too much at risk to try to do this on your own or with an inexperienced attorney.
Answer Applies to: Oregon
Replied: 10/26/2016
Stephens Gourley & Bywater | David A. Stephens
Any transfer of an asset within a short period of time before filing the petition can be set aside by the trustee.
Answer Applies to: Nevada
Replied: 10/21/2016
Eranthe Law Firm
Eranthe Law Firm | Cate Eranthe
No you can't. Don't do it. Go see a knowledgeable local bankruptcy attorney who can evaluate the asset - are the stocks in a 401k, IRA or other retirement vehicle? In which case leave it alone and no problem filing. Are they simply stocks? If so, I'd advise you not to file bankruptcy. You can't transfer an asset and file bankruptcy because that is a fraudulent transfer. Do NOT do it.
Answer Applies to: California
Replied: 10/20/2016
Ronald K. Nims LLC | Ronald K. Nims
When your mother put the stock in your name, it is presumed that she made a gift to you of the stock. That would make the stock your asset and your creditors would be able to take the stock to pay your debts. In order to show that your mother is still the owner of the stock, you need to provide some evidence that your mother - not you - acted as the owner of the stock. For example, did she report any dividend income on her taxes or did you report it on yours, did she vote the stock in any corporate elections, did she list the stock as her asset in a loan application. You'll have to disclose the stock to the bankruptcy court and explain the situation to the trustee.
Answer Applies to: Ohio
Replied: 10/20/2016
Marc S. Stern
Marc S. Stern | Marc S. Stern
Taking your money off the stock presents all sorts of problems. This should be discussed with your lawyer and your bankruptcy should be put off.
Answer Applies to: Washington
Replied: 10/20/2016
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    You need a better lawyer. It is entirely possible that that you hold title to the stock in a "resulting trust." See section 541(d) of the bankruptcy code. Do NOT take you name off title or sell it now. You have to disclose all transfers and that would smack of fraud.
    Answer Applies to: California
    Replied: 10/20/2016
    GARCIA & GONZALES, P.C. | Richard N. Gonzales
    That's a very big possibility.
    Answer Applies to: Colorado
    Replied: 10/20/2016
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    I believe if you follow this scheme, you will face loads of problems with your bankruptcy trustee. I suggest waiting at least one year after your mother takes the stock out of your name.
    Answer Applies to: Nevada
    Replied: 10/20/2016
    Richard B. Jacobson & Associates, LLC | Richard B. Jacobson
    This is definitely a problem. To change the ownership of the stock within a year before filing BR would be a 'fraudulent transfer,' in that it takes away property which your creditors could otherwise reach. If your mother is a joint owner, then she is entitled to cash the stock in. It is not entirely clear whether you need to list that transfer on your bankruptcy papers. But your obligation to disclose a great deal of financial information truthfully on the papers which are filed with the Court may require you to make the disclosure when you list transfers of property. Retain an experienced bankruptcy lawyer in your locality and discuss the situation with him or her. It's almost always worth the investment to have a good lawyer advising and representing you in a bankruptcy or any other court matter.
    Answer Applies to: Wisconsin
    Replied: 10/20/2016
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