Can my husband file for chapter 7 if he has a large amount of money in a trust fund? 11 Answers as of June 22, 2011

We started a trust fund in 2007 for our children and do not want to touch it. What will happen if he files for chapter 7?

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The Law Office of Mark J. Markus
The Law Office of Mark J. Markus | Mark Markus
If the account is truly a Trust account and is set up and designated as such, then it should be safe. If you have the legal right to withdraw any money from the account and use it for your purposes, or if you recently deposited funds into the account, there could be an issue. You need to have an attorney review all the documents and specifics.
Answer Applies to: California
Replied: 6/22/2011
Law Offices of Dennis Baranowski
Law Offices of Dennis Baranowski | Dennis Baranowski
Unfortunately, the issue of whether or not a trust fund will fall outside of the bankruptcy estate requires a review of the trust documents. Many people assume that funds that are set aside for their children are protected, but without the funds being placed in a properly created vehicle, the law will consider the funds to be the property of you and your husband. You should consult with an experienced bankruptcy attorney in order to determine whether or not the trust fund would be at risk if your husband filed a Chapter 7.
Answer Applies to: California
Replied: 6/22/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
I can not answer this question without looking at the trust. You need to take it to a competent bankruptcy lawyer to have it looked at.
Answer Applies to: California
Replied: 6/22/2011
Law Office of Harry L Styron
Law Office of Harry L Styron | Harry L Styron
It depends on the nature of the trust. If it is revocable then it will be an asset of the bankruptcy estate. If it is irrevocable, it will not. You should consult an attorney with the specifics of the trust.
Answer Applies to: California
Replied: 6/21/2011
Greifendorff Law Offices, PC
Greifendorff Law Offices, PC | Christine Wilton
It depends upon whether that is a revocable or irrevocable trust.
Answer Applies to: California
Replied: 6/21/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    If the trust fund is not owned by you it will not be liquidated in chapter 7. However, this may be a situation where chapter 13 is safer.
    Answer Applies to: California
    Replied: 6/21/2011
    Law Office of Asaph Abrams
    Law Office of Asaph Abrams | Asaph Abrams
    Trusts are tricky instruments. It's a dangerous presumption that a trustee would shy away from an asset by virtue of its classification or form of ownership. There's no free lunch... if it's too easy, then it's probably not. Your bankruptcy attorney must examine the trust in full. One of our jobs is foot preservation, as in preventing clients from shooting theirs off.
    Answer Applies to: California
    Replied: 6/21/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    It sounds like the trust fund would be an asset of your husbands bk estate and depending on the value of the fund he could lose it. You really need to see an attorney on this. Depending on the value it may be ok.
    Answer Applies to: California
    Replied: 6/21/2011
    Diefer Law Group, P.C.
    Diefer Law Group, P.C. | Abel Fernandez
    This can be an issue. You need to meet with an attorney. If you have money in trust accounts, you might not be able to file for bankruptcy.
    Answer Applies to: California
    Replied: 6/21/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    Depends on amount of money in trust.
    Answer Applies to: California
    Replied: 6/21/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    It depends on how the "trust fund" was set up. If you have control over the money and can take it out, then it could e included in your bankruptcy.
    Answer Applies to: California
    Replied: 6/21/2011
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