If I receive inheritance but don't have access to it for months does it still become part of the bankruptcy estate?

If you receive an inheritance within 180 days of filing bankruptcy, regardless of when you actually have access to it, it becomes part of the bankruptcy estate.  The date that determines whether the inheritance becomes part of the estate is the date in which you become entitled to receive it, which is typically the date of death.  Therefore, if the person dies within the 180 day window, the inheritance will become part of the estate.

Required to Notify the Trustee

If you become aware that you are entitled to receive an inheritance from a death that occurred within 180 days of filing bankruptcy, you are required to notify the trustee.  Upon notification, the trustee will have the option to seize the funds and distribute it to creditors.  However, if the trustee determines the inheritance is of an inconsequential amount, he may decide to abandon interest in it.  This is completely at the trustee’s discretion.

Chapter 13

Inheritance in a Chapter 13 is slightly different than a Chapter 7, which has been explained thus far.   In a Chapter 13, the inheritance funds will be used to determine how much money you have to pay creditors.  Instead of the funds being seized and distributed to creditors, the amount will likely be included in the Chapter 13 repayment plan and the creditors will receive the value of the inheritance over the life of the plan.  This ranges from three to five years, depending on your income and amount of debt.