Can a creditor enforce a judgement against a trust beneficiary if the trust has a spendthrift provision that forbids it?

UPDATED: Sep 16, 2011

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Can a creditor enforce a judgement against a trust beneficiary if the trust has a spendthrift provision that forbids it?

The spend thrift provision in the trust that I am the beneficiary of specifically states that the money must be paid to me as the beneficiary and no creditor even with a judgment against me can petition to take it. But a creditor has ask the court to enforce a judgement through the trust that has a spendthrift provision. Am I correct in assuming that the creditor can not do this and must instead get the judgement from the beneficiary who owes it directly?

Asked on September 16, 2011 under Estate Planning, California


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If you are a beneficiary under a trust and you have a judgment against you where the judgment creditor is attempting to collect upon it, the judgment creditor under most state statutes cannot levy upon a trust's assets especially where there is a "spend thrift provision" regarding a specific beneficiary for full or partial satisfaction of the judgment typically with success.

Rather the judgment creditor will need to wait until assets from the trust are paid directly to the beneficiary/judgment debtor before levying upon those assets depending where they are then deposited.

If the judgment creditor attempts to levy upon the trust assets concerning your interests in it as a beneficiary, you and the trustee will need to immediately file and serve a claim of exemption regarding this.

Good luck.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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