Getting an inheritance can be overwhelming, especially if your debts are piling high. However, many people fail to keep in mind that if they get an inheritance while their bankruptcy proceedings are underway, they might end up losing all of it. As per Dallas based bankruptcy law firm https://recoverylawgroup.com/, any inheritance received within 6 months of bankruptcy filing becomes a part of your bankruptcy estate. The bankruptcy trustee may take away that inheritance and use it to pay your creditors. Since most people never think of inheritance and bankruptcy in the same duration, being prepared for it is next to impossible unless you are consulting lawyers. In case you are expecting to receive any inheritance within a timeframe of 6 months, you need to put your bankruptcy papers on hold for some time if you don’t wish to lose the money to your creditors.
However, sometimes, delaying bankruptcy filing is not an option, especially in circumstances when foreclosure and repossession are imminent. In such cases, you need some other method to protect your inheritance. While estate planning, provisions could be made to protect the inheritance in case of a bankruptcy. This is done using the “spendthrift provision.” In this case, the personal representatives of the will/trust document or the trustee of the fund will need to ensure that if the beneficiary is in the middle of a bankruptcy proceeding or are planning to file for one, then essential steps are taken to protect the inheritance. If the financial situation is clear, then the inheritance is handed over to the beneficiary.
Most attorneys who are dealing with bankruptcy are not involved in inheritance protection. If you are expecting to land an inheritance amidst your bankruptcy proceedings and don’t wish to lose it to your clients, you need to consult with experienced bankruptcy attorneys at 888-297-6023.