About to go bankrupt - can possible inheritance while bankrupt be protected?

A

Adecco

Registered User
Messages
61
As the title states, I'm about to go bankrupt in a couple of months.

IF I was to come into an inheritance during bankruptcy I assume it would be taken.
Can I protect it in advance should an inheritance arise while bankrupt?

Get myself written out of will in advance?
Get will rewritten so as Inheritance put in a trust until a date after bankruptcy? (which would be simpler if possible)
Or can anything be done in advance to protect it should such a scenario arise?
 
Adecco said:
As the title states, I'm about to go bankrupt in a couple of months.

IF I was to come into an inheritance during bankruptcy I assume it would be taken.
Can I protect it in advance should an inheritance arise while bankrupt?

Get myself written out of will in advance?
Get will rewritten so as Inheritance put in a trust until a date after bankruptcy? (which would be simpler if possible)
Or can anything be done in advance to protect it should such a scenario arise?
Click to expand...

Hi Adecco, just browsing through forums. Did you get any advice on this after? Might be in a similar position myself. Best of luck.
 
The 2 ways to protect an inheritance from bankruptcy are:

  1. The will should create a trust.
  2. Change the will to leave it directly to you children. (This can be expensive from a Capital acquisitions perspective.)

A big issue with changing a will is that if the person develops dementia etc then he/she will be unable to change the will which means that you would be "stuck" with it.

A better solution might be to try and do a PIA/DSA using a gift from the person to persuade creditors to vote in favour.

Jim Stafford
 
Jim Stafford said:
The 2 ways to protect an inheritance from bankruptcy are:

  1. The will should create a trust.
  2. Change the will to leave it directly to you children. (This can be expensive from a Capital acquisitions perspective.)

A big issue with changing a will is that if the person develops dementia etc then he/she will be unable to change the will which means that you would be "stuck" with it.

A better solution might be to try and do a PIA/DSA using a gift from the person to persuade creditors to vote in favour.

Jim Stafford
Click to expand...
Thanks Jim. How does a trust work please?
 
The will would stipulate that a discretionary trust would be created with a trustee appointed. The trustee would have "discretion" as to how the trust assets would be allocated = the assets are not yours and are therefore not attackable by your creditors.

The creation of trusts is a complex area, with tax consequences etc, so expert legal and tax advice should be obtained prior to creating one.

Jim Stafford
 
You must log in or register to reply here.
Back
Top