Bankruptcy and Wills: What you need to know

John Gallagher from Sunshine Coast Law Firm Argon Law, discusses the importance of understanding how bankruptcy can affect the outcome of your will. 

Is someone to whom you have made a gift under your will, a bankrupt or at risk of becoming a bankrupt?

If so, you should be aware of the impact this may have on your testamentary intentions and what you can do about it.

More Information

Is someone to whom you have made a gift under your will, a bankrupt or at risk of becoming a bankrupt?

If so, you should be aware of the impact this may have on your testamentary intentions and what you can do about it.

When someone is declared a bankrupt, all of their assets at that time and any assets they may acquire whilst they remain a bankrupt become the property of their trustee in bankruptcy. That period usually last for 3 years.

If you were to die shortly before a beneficiary under your will becomes a bankrupt or during the 3 years they remain a bankrupt, then the whole of the gift would vest in the trustee and be distributed amongst the creditors of the bankrupt.

If there is a substantial risk of this happening, then you should immediately seek legal advice and change your will to remove any gift directly to the relevant person.

You can still benefit the family of that person in your will. One way of doing so is to create a trust under your will for the benefit of that family in such a way that there is no risk that any part of your estate will vest in the person whilst they remain a bankrupt.

Good estate planning will take bankruptcy risks into consideration, so please speak to your legal advisor or call us if you have any questions in regard to wills or estate planning and speak to one of our experienced wills lawyers or estate planning lawyers.

Argon Law is a Sunshine Coast law firm based in Maroochydore.  We are commercial lawyers advising on wills and asset protection and are eager to assist you in any way we can.

VIEW ALL VIDEOS

View Youtube channel youtube.com/ArgonLawMaroochydore

Call: 07 5443 9988 or
Leave a comment or make an enquiry about Bankruptcy and Wills: What you need to know

To prevent automated spam submissions leave this field empty.

All rights reserved | Argon Law © Copyright 2017 Website by VA