01 Feb Car in Someone Else’s Name: Resulting Trust
You’re worried about the car your son put in your name to save on insurance. Will a bankruptcy trustee take it? Not in Massachusetts, and probably not in your state.
It’s called a “resulting trust,” and this trust relationship is presumed where the non-owner son actually paid for the car and is its primary user. In effect, you are your son’s trustee for the car. You hold legal title, but your son owns the beneficial interest. In the bankruptcy world, you need to list your legal ownership in the bankruptcy papers but the trustee cannot take it from you or from your son.
A trustee can seek proof of the payments and use, of course. She also can emotionally extort a settlement from you by threatening unfounded litigation.
If your son is filing for bankruptcy protections, his beneficial interest needs to be listed and he is the real owner for bankruptcy purposes. He may or may not be able to protect it from the trustee, depending on his other assets and what exemptions (protections) are available.
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