However, with cautious planning, you may be able to protect your inheritance from the bankruptcy court. There are perfectly legal ways to complete this task, but they require close collaboration with your loved one or their estate.
A person who receives an inheritance prior to filing for bankruptcy is required by law to designate that money as an asset. The laws become more specific for those who inherit money after filing for bankruptcy.
Any money or valuables acquired within 180 days of filing for bankruptcy must be reported if they qualify as nonexempt property. Typically, inheritances are nonexempt, so they must be reported if received within 180 days of a filing.
However, on the 181st day, bankruptcy courts cannot use inherited funds to repay your creditors. Therefore, if you are able to collaborate with your benefactor, you may be able to receive your inheritance 180 days after filing for bankruptcy.
There are three primary methods to achieve this goal. One method is to remove yourself from the will of a loved one. This requires a great deal of trust, as the concept is that your funds will be transferred to a loved one, who will then gift them to you once your bankruptcy case has been resolved.
Another option is for a loved one to establish a spendthrift trust that will disburse funds to you on a specific date. Courts of bankruptcy cannot access these funds while they are in the trust. The final option is to renounce your inheritance, which could result in your never receiving the money.
" - https://www.affordablecebu.com/
