Legal Question in Bankruptcy in California
My grandmother passed away in August of 2008. She left my mother an inheritance around $70,000 through an estate account. My mother than filed for bankruptcy in December of 2008. She listed this inheritance in the bankruptcy. She was granted bankruptcy discharge in June of 2009. However due to delays in probate court my mother did not receive the $70,000 until April of 2010, roughly 10 months after the discharge. Does the trustee still have a right to the money that is not exempt (22, 000 in California I believe) Does my mom have to give the non-exempt portion of the money to the trustee. I have read that if 6 months time has passed after discharge, you are allowed to keep the inheritance. Is this true, please advise.
2 Answers from Attorneys
Unfortunately, what you read and what you cite is wrong. Caveat Emptor, World Wide Web Reader!
The date the right to inheritance became due (i.e. when the person with the will/bequest passed away) is determinative of whether the asset is property of the bankruptcy estate. The date it was received does not matter. If such a right becomes due up to 180 days after the bankruptcy filing date, then it is property of the estate that is subject to liquidation. Be sure to retain legal counsel.
Asaph Abrams
www.bankonitsd.com
Disclaimer: the above as well as any information found on our Web site is not legal advice and should not be relied upon. It does not create an attorney-client relationship. Unilateral communications may be misconstrued as they do not address all facets, nuances, and particulars, or all means of addressing a situation. This is strictly my opinion provided for general informational purposes and it pertains to California law. Seek legal and other professional counsel before acting in relation to bankruptcy. It's worth the cost.
Your mother was owed $70,000 by the estate of your grandmother when she filed for bankruptcy. She realized that when she filed and she reported it. That fact that it took a long time to get the money does not mean it is not part of the bankruptcy estate. The trustee is entitled to the money whenever your mother actually gets it. I sounds like your mother already knew that the unexempt amount would be gone so it should come as no surprise.
You are confused with the situation where there is an inheritance because someone has died after the Debtor (person filing) files for bankruptcy. In that situation is where the six month from filing date determines whether or not the inheritance is part of the bankruptcy estate. Your grandmother had already died when your mother filed for bankruptcy.
Your mother needs to consult with a bankruptcy attorney immediately unless she already has one. Anyone who files a bankruptcy without an experienced bankruptcy attorney should see a psychiatrist first because he or she is crazy.
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