Many Tennessee residents will encounter some form of severe financial difficulty at one time or another. The timing of that misfortune can make a world of difference in one's financial future. In fact, without careful planning, it is possible for an individual to lose the entirety of his or her inheritance. A well-timed Chapter 7 bankruptcy can prevent that outcome, and is an option that individuals may want to consider.
If an individual is in serious financial straits at the time that he or she receives an inheritance, creditors have the right to pursue inherited wealth to satisfy outstanding financial obligations. That can mean the depletion of some or all of an individual's inheritance. That outcome is probably not what was intended when the estate planning process was underway.
If an individual is aware that he or she will one day receive inherited wealth, it is important to address serious financial strain in a timely manner. When repayment through all other means is impossible, Chapter 7 bankruptcy offers a path to the elimination of many types of consumer debt. Once the process is complete, past creditors are unable to access inherited wealth.
That can make all the difference in the world to a Tennessee resident who was fortunate enough to receive an inheritance. After all, the primary purpose of estate planning is to pass down accumulated wealth from one generation to the next. Losing a significant portion of those assets to an heir's creditors is never the intended outcome. Chapter 7 bankruptcy can help to protect an inheritance from loss.
Source: pasadenajournal.com, "The Pitfalls of Joint Tenancy as an Estate Planning Tool", Marlene S. Cooper, Sept. 13, 2017