In a Chapter 7 or Chapter 13 Bankruptcy filing, the Court wants to know about a person’s complete financial circumstance — including any property or financial interests to which a person may not hold current title, but may gain access to as a beneficiary at a future date.
In bankruptcy, a person is asking the Court to cancel all of his or her debts — debts that are legitimately owed to other people or businesses who provided a product or service.
As such, the Court wants to provide as much possible payment to those people or businesses who are owed money by the filer, and will use any and all assets available by law to give as much payment as possible to legitimate creditors. Such an action is only fair.
Question 20 on Schedule B makes inquiry of the debtor\’s contingent interest in any Trust.
“Contingent” interest covers a future beneficiary — not the current title holders — of property within a revocable living trust, which is the topic of Question 20 on Schedule B.
So yes, a person must disclose potential future assets contained within a Trust to the Bankruptcy Court within a filing.
For complete information on creating a valid filing, see Standard Legal’s Bankruptcy legal forms software page.
To create a valid Trust, see Standard Legal’s Living Trust legal forms software page.