Bankruptcy Court Holds Debtor’s Wife’s Revocable Trust Are Not Asset of Bankruptcy Estate

Nathan Reuter and his wife established revocable trusts as Mr. and Mrs. Reuters being trustee and beneficiary of both trusts. The bankruptcy trustee sought to cause Mrs. Reuter’s trust to be included in Mr. Reuter’s bankruptcy estate.

The U.S. Bankruptcy Court ruled that the assets of the wife were not that of the husband’s estate, and therefore not reachable by the bankruptcy trust for the following reasons: first, Mr. Reuter was a discretionary beneficiary of the trust. Second, only the wife could revoke her trust, not her husband.

See In re Reuter: Bankruptcy Court denies trustee’s access to debtor’s spouse’s revocable trust, David A. Handler,

Posted by Jin Keol Park, Associate Editor, Wealth Strategies Journal