C. Alienability & Spendthrift Provisions

Question 1

Who may Principal/Beneficiary assign his income interests to in a trust?

Answer 1

Spouse/Children
- Legally obligated to support

Heirs

• Assign income > $10,000 pa
• Pursuant to acknowledged document

Question 2

Who/What may Beneficiary assign his remainder interests to?*

Answer 2

Anyone

ALL trusts

NOT income interests (dividends + interest)
- UNLESS Trust states otherwise

Question 3

Who may Principal assign his income interests to in a trust?

Answer 3

Any Beneficiary

• For support + education
• At Court’s discretion!!!

Question 4

What are Creditors’ statutory rights towards Trust?*

Answer 4

Creditors can reach 10% of Trust income
- Trust income (dividends + interest) is exempted to 90% extent

Creditors can levy vs (Excess income > necessary income for Beneficiary’s support and education)
- UNLESS Trust requires income accumulation

Question 5

Can Grantor make disposition towards himself (self-settled trust)?

Answer 5

If there are existing/subsequent Creditors => NO