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If I am contemplating bankruptcy and may be receiving an inheritance, can I disclaim the inheritance?

If I am contemplating bankruptcy and may be receiving an inheritance, can I disclaim the inheritance?

Q: What happens if a beneficiary disclaims inheritance?

If a beneficiary disclaims an inheritance, they legally refuse to accept it. This means the inheritance typically passes to the next eligible beneficiary as outlined in the will or by state law. It's important to follow the proper legal procedures for disclaiming to ensure the disclaimer is valid.

Q: How do you protect inheritance from bankruptcy?

To protect an inheritance from bankruptcy, you can disclaim it before filing. This involves formally rejecting the inheritance under state law, which may prevent it from being included in your bankruptcy estate. Always consult with a qualified attorney to ensure you follow the correct procedures and understand the implications.

Full question:

If I am contemplating bankruptcy and may be receiving an inheritance, can I disclaim the inheritance after the person dies, but before the will is filed in probate. This would be before I filed for bankruptcy. Is there a time limit between the time I disclaim the inheritance and the time I file for bankruptcy to prevent the disclaimed inheritance from coming into question and possibly pulled back into the bankruptcy. Another fact is the decedent has strongly requested that the inheritance be used to buy a home. This is currently impossible for me to do given my current financial condition. Therefore I do not feel comfortable taking the inheritance since I can't comply with the request of the decedent. Note, my address is in Seattle but this question is regarding someone who lives in California. Not sure if that makes a difference

Category: Bankruptcy
Date: 04/07/2025
State: Washington

Answer:

An authoritative answer to your question would require a legal analysis only available from a California-licensed attorney. We suggest you contact a CA-licensed attorney. However, there is information discussing your issues available on line, and we will send you the links we found. (We of course cannot guarantee the accuracy of any information in these links.)

There is information on disclaiming an inheritance in CA here:
http://answers.google.com/answers/threadview/id/726152.html

There is information on the interface of inheritance with bankruptcy at these links:
http://www.christianet.com/bankruptcy/inheritanceafterbankruptcy.htm
http://www.thebklawyer.com/thebkblog/2007/01/15/what-should-a-potential-bankruptcy-debtor-do-about-a-potential-inheritance/
http://www.allmandandlee.com/bankruptcy_blog/bankruptcy/can-creditors-claim-an-inheritance-in-bankruptcy/
http://www.bankruptcylawnetwork.com/2007/10/14/what-happens-if-i-inherit-property-while-im-in-bankruptcy/

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

Do creditors know when you inherit money?

Creditors may not automatically know when you inherit money. However, if you file for bankruptcy, you are required to disclose all assets, including potential inheritances. Failing to do so could lead to legal issues. It's important to keep your bankruptcy attorney informed about any inheritances to ensure compliance with bankruptcy laws.

What happens if you get an inheritance while filing bankruptcy?

If you receive an inheritance while filing for bankruptcy, it may be considered part of your bankruptcy estate. This means it could be used to pay creditors. The timing of the inheritance's receipt is crucial; if you inherit after filing, it may be treated differently than if you inherit before. Consult your bankruptcy attorney for specific guidance.

How can I protect my inheritance from bankruptcy?

To protect your inheritance from bankruptcy, you can consider disclaiming it according to state laws. In California, this involves formally renouncing your right to the inheritance, which may prevent it from being included in your bankruptcy estate. Consulting with a California-licensed attorney is essential to navigate this process correctly.