# About to go bankrupt - can possible inheritance while bankrupt be protected?



## Adecco (11 May 2017)

As the title states, I'm about to go bankrupt in a couple of months.

IF I was to come into an inheritance during bankruptcy I assume it would be taken.  
Can I protect it in advance should an inheritance arise while bankrupt?

Get myself written out of will in advance?
Get will rewritten so as Inheritance put in a trust until a date after bankruptcy? (which would be simpler if possible)
Or can anything be done in advance to protect it should such a scenario arise?


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## gahfan (15 Sep 2017)

Adecco said:


> As the title states, I'm about to go bankrupt in a couple of months.
> 
> IF I was to come into an inheritance during bankruptcy I assume it would be taken.
> Can I protect it in advance should an inheritance arise while bankrupt?
> ...



Hi Adecco, just browsing through forums. Did you get any advice on this after? Might be in a similar position myself. Best of luck.


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## Jim Stafford (15 Sep 2017)

The 2 ways to protect an inheritance from bankruptcy are:


The will should create a trust.
Change the will to leave it directly to you children. (This can be expensive from a Capital acquisitions perspective.)

A big issue with changing a will is that if the person develops dementia etc then he/she will be unable to change the will which means that you would be "stuck" with it.

A better solution might be to try and do a PIA/DSA using a gift from the person to persuade creditors to vote in favour.

Jim Stafford


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## gahfan (15 Sep 2017)

Jim Stafford said:


> The 2 ways to protect an inheritance from bankruptcy are:
> 
> 
> The will should create a trust.
> ...


Thanks Jim. How does a trust work please?


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## Jim Stafford (19 Sep 2017)

The will would stipulate that a discretionary trust would be created with a trustee appointed.  The trustee would have "discretion" as to how the trust assets would be allocated = the assets are not yours and are therefore not attackable by your creditors.

The creation of trusts is a complex area, with tax consequences etc, so expert legal and tax advice should be obtained prior to creating one.

Jim Stafford


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## gahfan (19 Sep 2017)

Thank you Jim


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