Trust and bk

[Uncertaintrust]

What is the name of your state (only U.S. law)?

California


Relevant facts.
I have no wife nor issue and it was suggested by the trust attorney and parents that I open my own living trust and have “my” trust named as my “issue type person” in the “family” trust. should I predecease my parents. my share of the estate would go to my trust where I could direct where I wanted it to go.

Recently through embezzlement /misuse of funds from an investment , and bankruptcies from my debtors, I am out over 500,000 my life savings and will have to go bankrupt.

My father only has a few weeks left to live and upon his death the family trust becomes irrevocable. I am successor trustee and become trustee upon my fathers death. Mother is still alive and may live another 10 years. Yes there are other beneficiaries. I have nothing of value, I was injured in a car accident and have not worked and have had no income in the last 4 years.

Questions;
1. If I fund a trust with assets of value less than $300.00 will that trust be subject to adverse consequences of my banktrupty.
a. I do not want “my” trust endangered since the family trust will become irrevocable and I don’t want my share to be lost back to the other benefactors, I don’t want any attachments to “my trust” nor do I want “my trust” revolked. If that is even possible . (yes there is a spendthrift clause in the “ family” trust)

2. I will have to state in bankruptcy that I have “my trust” will that send up a red flag to the courts that I have a trust valued under $300.00?
Ie the courts may wonder why the heck I have a trust valued at less than $300.00
3. Since I will soon be trustee of an irrevocable trust will its irreconcilability cause concern in my current bankruptcy and jeopardize my future benefits from the “family” trust?
4. As trustee I will soon be allowed to draw a salary as trustee of the “family” trust.( I will still be way under the 56K or 58K allowable annual income for bankruptcy) will the trustee income cause problems with the courts in that I will be available to draw a salary from the family trust as trustee?

All in all I want to protect my share of the estate from current creditors, and I want to ensure that I have the ability through “my” trust to be able to give my share to whomever I want should I die before my mother.

 

[curb1]

What is your mother's involvement in the "family" trust? Are your mother and father divorced?

 

[curb1]

More questions.

1) Who are the other beneficiaries?

2) Is your mother getting anything from this "family" trust?

3) Is your mother a grantor of the trust?

4) Why is mother not a trustee of the "family" trust?

5) What will your duties be as trustee of the trust?

 

[Uncertaintrust]

Parents are currently both trustors and trustees of the Family Trust The trust was amended a while back that upon Fathers death that the trust become Irrevocable and I am to become the trustee. They are still married.

Other beneficiaries are four other children and myself (fulls and halves and steps)

Mother is still trustor and will be taken care of by the trustee

I am lost here, what does any this have to do with my questions?

 

[curb1]

It just seems like a real mess.

You said, "Recently through embezzlement /misuse of funds from an investment , and bankruptcies from my debtors, I am out over 500,000 my life savings and will have to go bankrupt."

It is difficult to understand why anyone would make you a trustee of a trust that many depend. Why would you put $500,000 of your life savings into investments like this that would cause you to go bankrupt?

What have the other beneficiaries said about this? Are they on board with you being the sole trustee? Or, is there a cat fight coming?

Is your goal to claim bankruptcy, wipe the slate clean, and then get whole again from the trust assets?

 

[Uncertaintrust]

“It is difficult to understand why anyone would make you a trustee of a trust that many depend. Why would you put $500,000 of your life savings into investments like this that would cause you to go bankrupt?” Really? Are you serious… after what’s gone on in the last 5 years with the economy the theft, the corruption? Really, you want to go there?

Why would want “someone like me” as a trustee? Hmmm just might be.. I mean just might possibly be because I am not only honest but I am the one responsible for making the Family trust as valuable as it is.(but you never really know right?) Secondly I am out my money because I put trust in an attorney. Yeah I know big mistake, who can really trust attorneys, right?

As far as a “ Cat fight” No, I doubt it since the entire family called me and asked my permission to place me in charge of the trust

I believe I already stated my goal. to clear my debt without harming or encumbering any of my share from my families trust. I will not inherit anything from the trust for possibly a decade.

So how about answering a few of my questions now.. eh?

 

[curb1]

The part that is interesting is that you want to set up a trust to enable you to give away assets that aren't yours "to whomever I (you) want should I (you) die before my (your) mother".

What was the reason to make the trust irrevocable upon your father's passing? Why not just leave it as it was with your mother as the grantor of the revocable trust and you (and possibly her) as the trustee of that trust? Your "creditors" would be held at bay because you would not have the assets. When will your bankruptcy be finalized?

 

[tranquility]

1. If I fund a trust with assets of value less than $300.00 will that trust be subject to adverse consequences of my banktrupty.

While your asset (trust rights) are subject to the BK, I suspect you will be able to shield that small of an asset if desired.

a. I do not want “my” trust endangered since the family trust will become irrevocable and I don’t want my share to be lost back to the other benefactors, I don’t want any attachments to “my trust” nor do I want “my trust” revolked. If that is even possible . (yes there is a spendthrift clause in the “ family” trust)

Your trust will be the beneficiary of the other trust. Nothing written in that trust changes yours.

I will have to state in bankruptcy that I have “my trust” will that send up a red flag to the courts that I have a trust valued under $300.00?

Only cheats worry about "red flag"s. You will disclose to the courts you have the trust during the bankruptcy.

Since I will soon be trustee of an irrevocable trust will its irreconcilability cause concern in my current bankruptcy and jeopardize my future benefits from the “family” trust?

The spend thrift clauses may affect your rights. As a general rule, nothing should change. (Depending on the timing of events.) As to the specific trust instruments, they need to be read with the facts in mind to tell. Credit issues can hinder a trustee and make some issues harder to deal with.

As trustee I will soon be allowed to draw a salary as trustee of the “family” trust.( I will still be way under the 56K or 58K allowable annual income for bankruptcy) will the trustee income cause problems with the courts in that I will be available to draw a salary from the family trust as trustee?

If the event has occurred causing you to be able to draw salary, it will certainly be considered in the BK.

All in all I want to protect my share of the estate from current creditors, and I want to ensure that I have the ability through “my” trust to be able to give my share to whomever I want should I die before my mother.

The "estate" has no heirs until the principal is dead. There is no share until both have died. You cannot "protect" (in the way you mean) something which is not yours. Once the rights are no longer inchoate, they are subject to the claims of creditors limited by state law and trust terms regarding the spendthrift clause. Having your trust be a beneficiary will not affect what you can eventually get, with the possible exception of conflicting or inelegantly worded spendthrift clauses. If the family trust's clause talks about age or other characteristics of the recipient rather than for benefit of phraseology, someone could argue your personal trust isn't that old or has medical needs. Hope that standing between people and free money doesn't hurt.