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It depends on when you receive the inheritance. If you received an inheritance right before you filed for bankruptcy, that may raise some questions with the court, as they will want to know what you did with that money.
And while technically, an inheritance received prior to filing is not subject to the bankruptcy estate, how the courts view your inheritance will depend on the timing of receiving your inheritance compared to the timing of your filing for bankruptcy.
If you receive an inheritance (whether of money or of property) within six months of filing for bankruptcy, you will need to disclose that to the trustee, and the trustee will have to decide whether or not to make an attempt to collect on your inheritance.
During bankruptcy meetings, you’ll likely be asked if you expect to receive an inheritance. If the answer is “yes” and the timing is soon, even if your bankruptcy case would have technically been closed, the trustee could keep your case open to get their portion of your inheritance.
In all, if you receive an inheritance within six months of filing, you have to notify the bankruptcy court. If you receive an inheritance a year after you file, you don’t have to disclose that as the time limit has expired.
Attorney Alec Solomita is a respected, knowledgeable bankruptcy law attorney serving Florida. Since 2007, he’s helped clients just like you understand the impacts and implications of receiving an inheritance near to filing for bankruptcy, and plan accordingly.
Have questions, or in need of legal representation? Reach out to Solomita Law, PLLC for an initial consultation today.
The biggest mistake filers make is not disclosing receiving the inheritance to their attorney beforehand. If your attorney doesn’t know there’s an inheritance coming, they can’t prepare you for what could happen to that inheritance if you file.
Another major mistake is not disclosing an inheritance that is received within six months of filing, as that can get you into trouble with the trustee.
Truthfully, we don’t know when someone is going to die, but we do know if someone is likely reaching the end of life and has the ability to leave us money. In that situation, you should answer questions about the possibility of receiving an inheritance honestly. Let your attorney know beforehand, as well.
It’s important to speak with a bankruptcy attorney so they can let you know what would happen to your inheritance if you file. This way, you can make an informed decision. If you know you’re going to inherit $50,000 from a grandparent who likely has weeks or months to live, you may hold off on filing so you can receive that money and choose what to do with it.
If you don’t inform your attorney of that situation and your grandparent passes away a month after you file, now the court’s in a position to take that money to pay your debts. Fully disclosing these situations to your attorney keeps you in control, even if you choose to allow your inheritance to become part of the bankruptcy estate to help pay off your debts.
For more information on receiving an inheritance during bankruptcy, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (407) 255-7458 today.
Attorney Alec Solomita is a respected, knowledgeable bankruptcy law attorney serving Florida. Since 2007, he’s helped clients just like you understand the impacts and implications of receiving an inheritance near to filing for bankruptcy, and plan accordingly.
Have questions, or in need of legal representation? Reach out to Solomita Law, PLLC for an initial consultation today.
