Impact of Bankruptcy Filing by Beneficiary of Decedent's Estate by Ann Marie Maccarone and Deborah DiNardo, Esq.

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As we have previously reported, litigation related to decedents’ estates continues to be generated due to the increase in bankruptcy filings by beneficiaries. A recent Rhode Island Supreme Court case, In Re Edwin H. Tetreault, Rhode Island Supreme Court C.A. # 2009-166, answered questions certified by the United States Bankruptcy Court, District of Rhode Island. The questions arose out of a bankruptcy filed by a debtor who was a beneficiary under the residuary clause of a will.

The debtor inherited real property with his sister as tenants in common. He had been living alone at the property. His sister was also executrix under the will and wanted to evict her brother and sell the property in order to pay debts of the estate. The debtor filed personal bankruptcy and claimed a homestead exemption in the property. The bankruptcy trustee objected to the claim of homestead asserting the debtor lacked sufficient ownership interest to claim the exemption.

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Published In: Bankruptcy Updates, Finance & Banking Updates, Residential Real Estate Updates, Wills, Trusts, & Estate Planning Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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