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VIC Beneficiary Discharged from Bankruptcy Before Distribution of Will?

Discussion in 'Wills and Estate Planning Law Forum' started by John Andonopolus, 26 October 2015.

  1. John Andonopolus

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    I would like to know if a beneficiary of a deceased estate is entitled to their share of the estate if they were bankrupt when the will maker passed away but discharged from bankruptcy before any distribution occurred.

    Thanks.
     
  2. Sophea

    Sophea Well-Known Member

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    Hi John,

    It depends on the specific terms of the will regarding bankrupt beneficiaries - however provided that there is no term in the will to the contrary an undischarged bankrupt is just as entitled to receive their distribution as any other beneficiary. However any money an undischarged bankrupt is to receive under the Will, goes straight to his trustee in Bankruptcy to be paid to his or her creditors. However, if they are discharged from bankruptcy at the time of distribution then the money will go to them as normal. I believe it's the status of the bankrupt at the time of distribution that matters here.
     

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