Monday, November 10, 2014

The Insolvent Debtor - Are Charity And Family Gifts Still Possible?

According to Jay Adkisson there are two questions that estate planners commonly ask when they have a client in financial distress:

(1) If the Debtor has a history of tithing or making other charitable contributions, can the Debtor continue giving to charity?

(2) If the Debtor has a history of making annual gifts to his children, can the Debtor continue making those gifts?

The answers can never be better than a “maybe, it depends”. Mostly, it depends on whether the Debtor is in bankruptcy, or (if not) whether the Debtor is “insolvent” — the latter which may be established by the fact that the Debtor is not paying bills as they come due.

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