In re Rowand. No. 11-81717, 2012 Bankr. LEXIS 3501 (Bankr. C.D. Ill. Jul. 30, 2012)

(Chapter 7 debtor was beneficiary of revocable trusts established by her parents; both trusts had spendthrift provisions; debtor’s mother died within 180 days post-petition; trustee argued debtor’s interest under trusts is property of bankruptcy estate; court held, under state law, trusts were valid inter vivos trusts enforceable according to their terms, so debtor’s beneficial interest was presumptively part of the bankruptcy estate subject to exclusion because of  spendthrift provision; court disagreed that debtor’s ability to withdraw assets automatically made trust part of bankruptcy estate because a determination of debtor’s rights and spendthrift provision is determined at time petition is filed; in this case, debtor’s mother was still alive when petition filed, so debtor had no present right to assets or income of either trust at that time; court also disagreed that mother’s death within 180 days of petition filing made bequest part of  bankruptcy estate; court held that non-testamentary inter vivos trust is not a “bequest” devise” or “inheritance” under the statute, so it did not defeat exclusion of asset by spendthrift provision; court did advise trustee he could file separate motion for specific relief due to debtor’s failure to disclose beneficial interest and lack of explanation for omission).