QLD Inheritance to be received by Discharged Bankrupt. Stat Dec question.

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Max Aurum

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14 March 2019
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My wife was discharged from bankruptcy 20 months ago. A few weeks ago, her father died and she has been named as a beneficiary in the will. Her bankruptcy trustee has advised that they do not have an interest or claim on any inheritance she receives and she can keep any inheritance. Also, there is nothing contained in the will limiting or mentioning a reduced entitlement to any beneficiaries if they were ever bankrupt.

She received a statutory declaration (Qld) from the probate solicitor asking her to declare that she is a named beneficiary of the deceased estate.

QUESTION 1. Why does the declaration also include the statement “I have never been bankrupt nor, to my knowledge, have I ever committed any act of bankruptcy”?

Obviously, the declaration needs to be changed to declare that she is a discharged bankrupt. We are aware that it is illegal to lie on a statutory declaration. The other beneficiaries do not know that she was bankrupt. She is concerned that if this fact got back to their frail surviving mother, it would be extremely damaging to her mental/physical health. She always despised the concept of borrowing money.

QUESTION 2. Can or must the probate solicitor (and/or executor or trustee) keep her bankruptcy confidential from the other beneficiaries?

We are of the understanding that it is the physical printed statutory declaration document itself that the declarant signs and is witnessed by a J.P., C.Dec., or solicitor (not the pdf provided by the probate solicitor).

QUESTION 3. Can she amend the provided statutory declaration herself to declare that she is discharged, either by crossing a statement out, or by changing the wording?
 

Rob Legat - SBPL

Lawyer
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16 February 2017
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Gold Coast, Queensland
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Answer 1: Because the executor will want to know whether they should be dealing with the beneficiary personally, or their trustee in bankruptcy. A person who is currently bankrupt cannot generally deal with their assets. By having the declaration, the executor gains some ability to defend any challenge to their administration of the estate by saying they relied on the sworn statement.

Answer 2: Regarding the beneficiaries: You can ask, but they don't have to - although they shouldn't be disclosing that information as a matter of course. Regarding the executor: they can and should be told, as the solicitor should recommend a search to confirm the discharge status. Bear in mind the solicitor acts for the estate and owes the duties to the estate in total - not a single beneficiary in particular. Also bear in mind that bankruptcy status is public information.

Answer 3: Yes, but I'd suggest getting a fresh statement prepared for the sake of clarity.