How Bankruptcy Impacts Your Inheritance

Making the decision to file for bankruptcy can be difficult, but sometimes bankruptcy is the best answer to your financial difficulties. Filing for Chapter 7 or Chapter 13 bankruptcy can be the tool that helps you get out from under massive debt. But the process of bankruptcy isn’t easy and it comes with some hard to swallow consequences. If you are expecting to receive an inheritance soon or if you have recently been the recipient of money or property from a loved one who has passed, you need to think about what bankruptcy can do to your inheritance.

In bankruptcy, there is a 180-day rule. Once you file, the first 180 days immediately after are critical to your bankruptcy case. In this time period, whatever income you receive becomes part of the bankruptcy estate. Any inheritance you receive during this time will also become part of the bankruptcy estate and what happens to that inheritance will depend on your specific bankruptcy case. It is important to note that you do not have to actually have possession of the money or property you are entitled to in your inheritance for it to be included in the bankruptcy. As long as you become entitled to the inheritance within the 180-day time frame, it will be included in your bankruptcy.

If your spouse receives an inheritance, it is not necessarily part of the bankruptcy estate. Your spouse’s inheritance will only be included in the bankruptcy estate if you are filing for bankruptcy together. If your spouse is not included in the bankruptcy case, then the inheritance should not be included. The only way the inheritance could become part of the bankruptcy estate is if it is used in conjunction with marital assets. The best way to avoid this issue is to keep your spouse’s inheritance totally separate from any shared assets.

You are responsible for notifying the bankruptcy trustee of the money or property you are entitled to under your inheritance. Even if you fear the inheritance may be taken during the bankruptcy to pay off creditors, you cannot withhold this information. Talk to a bankruptcy attorney about when and how to notify the bankruptcy trustee. There may be specific forms you need to amend for your case depending on whether the inheritance was money, personal property, land, or a structure.

Whether or not you will be able to keep this inheritance depends on if it falls under an existing exemption. In New Jersey, you can keep up to $1,000 of personal property and up to $1,000 of furniture and household goods. You are also entitled to keep your clothing and your burial plot. If married and filing jointly, you and your spouse can double the personal property exemption to $2,000. Your bankruptcy attorney will be able to help you understand what part of your inheritance, if any, is exempt. If your inheritance is not exempt, the court will liquefy the asset to go towards paying off creditors under Chapter 7 or it will be included in the calculation for your payment plan under Chapter 13.

If your loved one passes or you become entitled to the inheritance 181 days or more after you filed for bankruptcy, it is not part of the bankruptcy estate. Under Chapter 7 bankruptcy, your inheritance is yours to keep and it will not be used to pay off creditors. Under Chapter 13 bankruptcy, however, your inheritance could be calculated into your monthly payment plan. Unless it is exempt, your bankruptcy trustee can count it as income and determine how much of it should go towards your outstanding debts.

Bankruptcy can be a confusing and difficult process. Don’t become overburdened with stress over all the little details. At Veitengruber Law, we’re experienced in handling the intricacies of New Jersey bankruptcy law. If you are concerned about how bankruptcy can impact your inheritance, we can help.

Advertisements

Choosing the Right NJ Estate Planning Attorney

NJ estate planning attorney

When it comes to estate planning, it can be confusing to know where to begin. Despite the many benefits of working with an estate planning attorney, people taking the first steps to plan for the future can be hesitant to discuss their assets and personal details with a professional. The best NJ estate planning attorneys provide in-depth knowledge of all the tools you will need to secure your future, but it can be hard to know where to start looking for the qualified professional that fits your specific needs. Here is how you can make sure you’re getting the best legal advice for your personalized estate plan.

 

  1. Talk to friends and family.

One of the best sources for finding a quality estate planning attorney is to ask friends and family who they have used in the past. If you know someone who has recently created an estate plan, ask them if they worked with an estate planning attorney. Getting a recommendation from a trusted friend will typically mean more than any online review. The people close to you will also be able to tell you about their experiences so you know what to expect.

 

  1. Don’t be afraid to look outside your area.

While you certainly want to work with a lawyer that is licensed to practice in your state, don’t just settle for the attorney that is the closest to you. It is better to find an attorney that fits your needs first and look at geography second. Many attorneys will be willing to work with you if travel is difficult for you, or may have a satellite office in your area. The right attorney will make the effort to meet your needs.

 

  1. Consult with other professionals.

If you work with an accountant, a financial advisor, or another kind of attorney, ask if they could suggest any estate planning attorneys. These professionals tend to work together for clients and therefore know the best of the best in each specialty area. It’s even possible these trusted professionals worked personally with an attorney on their own estate plan. They will have insight into a potential estate planning attorney’s work ethic, business practices, and expertise.

 

  1. Watch out for internet directories.

While google searches have become the internet’s version of the yellow pages, be wary of relying too much on internet directories. Most of these directories are compiled of attorneys and law offices that have paid a large fee for a good review as a “specialist.” Only trust lists that are verified by a third party. These directories are not paid to list an attorney and they use specific criteria to rank qualified professionals. One great website to search for lawyers is the verification site www.avvo.com.

 

  1. Bar Association referrals.

State and local Bar Associations offer lawyer referral services to the public. The NJ Bar Association sorts their referral lists by specialty so you can look specifically for an estate planning attorney. Keep in mind that the Bar Association is not assessing attorneys based on the quality of their work and that attorneys pay a fee to be featured in these lists. Just because an attorney is listed on this website, it doesn’t mean they will be a good match for your legal needs. However, if you are struggling to find an attorney, this may be a good jumping off point.

 

  1. Look for signs of accountability.

A good estate planning attorney will have a malpractice insurance policy. Even the best attorneys make mistakes. An attorney that acknowledges this fact and has taken the necessary precautions shows trustworthy judgment and professionalism. You can also see if the attorney is part of any professional organizations. This can indicate that they are interested in keeping up with the latest estate planning developments. Taking the time to be involved in these organizations means an attorney is constantly sharpening their knowledge and networking with other professionals. Keeping up to date on recent laws and planning techniques will benefit you and your family.

 

At Veitengruber Law, our legal team is experienced in providing estate planning and asset protection services that are customized to fit your specific needs and future goals. We know how intimidating it can be to consult with an attorney. We will take the time to sit down with you to discuss your concerns and make sure you understand all of your legal options. We want you to be able to make informed decisions about your future. Call us today at 732-852-7295 for your free, no-obligation consultation. We work with clients throughout New Jersey and can discuss your options over the phone if travel is difficult. We also have a satellite office in Bordentown, NJ.

 

Don’t wait to make a plan to secure your future. Talk to an experienced estate planning attorney today.

Protecting Your Assets in 2019 with our NJ Estate Planning Firm

NJ estate planning

The typical mental image associated with estate planning may be an elderly person creating a will towards the end of their life. While estate planning is a process to help people prepare for end-of-life issues, it is much more than just creating a will. Estate planning is a concern for people of all ages who have assets to protect and/or family members and loved ones to care for. If you are looking for ways to protect your assets in 2019, our NJ estate planning team can help you get started.

What is included in an estate plan?

Every estate plan is personalized to the individual’s needs. Your plan will look different depending on your goals, your finances and your family situation. An estate plan can include information about medical care, who can make medical and financial decisions on your behalf and what your funeral and burial preferences are. It can ensure the protection of your assets during your lifetime and facilitate the transfer of assets to loved ones after you have passed away. An estate plan can help you establish a legal precedent for your financial, medical, and personal decisions during your lifetime and at the end of your life. Our team at Veitengruber Law will sit down with you to create a personalized plan to suit your needs.

Why do I need an estate plan?

If you do not have an estate plan, some of the most important decisions of your life will no longer be under your control. Unexpected life events that may potentially cause you to become disabled, sick, or seriously injured could cost you the assets you’ve worked so hard for. Because it is impossible to foresee if and/or when you may become sick or unable to take care of yourself and your assets, it is crucial to establish an estate plan as soon as possible. In addition to this, some tools that help you during estate planning may take time to become legally effective. If you do not take the time to plan now, it could cost you or your loved ones later.

The goals of an estate plan are multiple and varied depending on your needs. Typically, an estate plan determines what happens to your assets, helps you protect your loved ones, and gives you the ultimate control over your legacy. With an estate plan solidly in place, you get the peace of mind that you will not be leaving behind unfinished business and your loved ones are not burdened with making big decisions on your behalf. Instead of the legal system and individual family members making decisions about your assets, you will have the final say. You can determine what your legacy will be.

It is also important to note that estate plans should be updated regularly to reflect any significant changes in your life. A divorce, the birth of a child or grandchild, or any changes to your family will need to be reflected in your estate plan across any planning tools you have in place. As your assets grow and you have more responsibilities, you may need to use different tools to ensure an easier process for you and your loved ones. We can help you keep your estate plan organized and up-to-date.

What are some key tools for my estate plan?

There are many different estate planning tools you can use to establish your goals. A last will and testament is one of the more well-known tools used to provide inheritance instructions. What a lot of people don’t realize about a will, is that in most cases your assets will have to go through a probate process, which includes costly probate proceedings, your assets going on public record, and a potentially lengthy legal process. This is to say that not every tool for estate planning is right for everyone.

There are many different tools you can use to set up your estate plan. Some of these tools include establishing a trust, inter vivos gifting, a living will, advanced directives, power of attorney, life insurance, or even incorporating a business. Creating an estate plan involves knowing which tools to use and how to use them correctly. At Veitengruber Law, we can provide you with expert legal advice on optimally utilizing these tools to your advantage.

Estate planning is a complex process with a number of potential elements involved. One error could cost your family and loved ones their inheritance. Our team has years of experience with New Jersey estate planning. We can help you establish a plan individualized to fit your specific needs and continue to work with you to modify that plan if your circumstances change. With Veitengruber Law’s specialized estate planning, you can sleep easy knowing that your legacy and the future of your loved ones has been adequately planned for.

*Photo by CreditScoreGeek.com