bankrupt then receiving inheritance - making a gift to avoid losing inheritance

thousandyard

im about to go bankrupt but will be getting £30,000 fom my mum's will ina bout 6 months. it is my intention to inherit then make a gift of said amount to my brother. does anyone know if this gift will be able to proceed ?

redpete

I don't know, but your brother must be chuffed about getting an extra £30k to do with what he wants.

TheCat_2

I'm sorry but you won't be able to gift the inheritance if it's left to you and received while bankrupt!

Without wanting to upset you has your mum already died?

If she hasn't but is unfortunately terminal she could revise her will leaving your inheritance to your brother

If she has already died it may be worth consulting a solicitor and an Insolvency Practitioner BEFORE you go bankrupt with a view to getting a 'deed of variation'

When I worked for Natwest i have recollections of a beneficiary getting a 'deed of variation' on his mothers will.

The will had been poorly written and a lot of her estate was going in inheritance tax.

The deed of variation effectively changed the will to a more tax efficient one. Possible because had his mother received proper advice prior to her death she would have written the will differently.

tigerfeet2006

You will not be able to do this. The OR will be able to reverse it if you do and you could end up in deep doodoo.

Penelope_Penguin

tigerfeet2006 wrote: »

You will not be able to do this. The OR will be able to reverse it if you do and you could end up in deep doodoo.

...... unless the mother is still alive. There's nothing to stop her changing her will to favour one child over another, as long as this is done properly and not a "sham" so that the OP can claim their inheritance once they're discharged.

skylight

If your mother has already passed away, there is nothing you can do with the money. You will be the beneficiary and your official reciever will take that money from you once you go BR regardless of how long it may take to actually get the money. If you pass it to your brother, the OR will reverse the transaction potentially leaving your brother in the doo-doo money wise along with you in it with the OR.

The ONLY way to avoid this, is if your mother is still alive and she changes her will ASAP. Whilst she is alive, she can do what she pleases with her money.


Or, controversly, you could use the inheritance to re-pay some of what you owe whilst spending some on yourself. Relieve the pressure and enjoy yourself a bit. Hopefully avoiding bankruptcy altogether.

NeverAgain_2

I don't think the OP doesn't do the general image of bankrupts much good by trying so hard to avoid repaying the creditors.

Why is this seen as such a last resort?

I'd have thought anyone with debts would be relieved and delighted to receive a windfall enabling them to pay what they owe.

confused76

would the £30k be enough to stop you going br? i think you should contact one of the free debt charities if you haven't done so already
www.nationaldebtline.co.uk
www.cccs.co.uk
www.citizensadvice.org.uk

thousandyard

thanks everyone for your replies. they are much appreciated. im wonderring how the OR would become aware of my receivng an inheritance. yes unfortunately my mum died a couple of months ago.

confused76

thousandyard wrote: »

thanks everyone for your replies. they are much appreciated. im wonderring how the OR would become aware of my receivng an inheritance. yes unfortunately my mum died a couple of months ago.

i'm sorry to hear about your mum...

they have their ways and means, please don't risk withholding information from the OR, you would land yourself in deep water.

there is a section on the br forms for inheritance monies due to you, you would need to fill this out truthfully as it is a legal document and sworn under oath

you also need to provide copies of bank statements

if you didn't tell the OR, the OR has the power to extend the bankruptcy conditions for up to 15 years

magpiecottage

It may depend on what the will actually says.

I have seen wills contain provision for the possibility of a recipient's bankruptcy and/or give discretion to the executors which allowed them to avoid passing on estate assets only for them to be claimed by creditors.