Can a deceased estate divert an inheritance to bypass a bankrupt person?

Discussion in 'Wills & Estate Planning' started by Foxdan, 24th May, 2017.

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  1. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    I'm confused. The person is non contactable and then requests their inheritance is treated a different way. Their TIBis them....The bankrupt cannot act witn capacity. The deceased should have provided their interest on a testamentary basis so their portion is held on trust to prevent it becoming a personal asset

    An executor cannot choose to deny a benefit unless permitted
     
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  2. Foxdan

    Foxdan Well-Known Member

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    The person is contactable by the executor but refuses to communicate with their family.
    The person has been bankrupted at least once in the past but the exact date is unknown. So not sure if creditors can still chase them.
    I'm not sure what you mean about "choose to deny a benefit"
     
  3. Foxdan

    Foxdan Well-Known Member

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    Well, the latter lead to the former.
     
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  4. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    So they are contactable. They are non responsive
    The executor has no interest or concern with bankruptcy unless a will says they should.
    Thus they cannot deny a benefit. if it is legally provided.

    An executor may seek legal advice paid from the estate (allowed by state law) as otherwise they are personally liable for beneficiary loss
     
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  5. Bonz

    Bonz Well-Known Member

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    I would have thought if the beneficiary was bankrupt at the time of distribution, then the trustee in bankruptcy would control the gift received by the bankrupt.

    If the bankrupt is discharged, then the discharged bankrupt receives the gift.

    The question of when the estate is distributed is key, as the trustee in bankruptcy has the right to have the estate administered, so delay in doing so by the executor to protect the bankrupt beneficiary could result in the bankruptcy trustee legally enforcing its right to have the estate distributed.
     
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