Extra

Question 1

Can you sell your interest in a mandatory trust?

Answer 1

Yes

Question 2

How do you ensure the intent of the settlor is kept (no selling interest in trust or having creditors mooch)

Answer 2

Spendthrift Clause in a Trust

Question 3

Spendthrift Clause: What is it?

Answer 3

Trust clause that restricts beneficiaries’ right to transfer interest in a trust and prevents creditors from having anything to do with a trust.

Question 4

Spendthrift Clause: Language to make it:

Answer 4

“The interest of the trust beneficiaries shall not be capable of assignment or seizure by legal process.”

Question 5

Spendthrift Clause: Does it even protect against tort creditors>

Answer 5

yes

Question 6

Spendthrift Clause: 3 things that can pierce Spendthrift

Answer 6

1) Tax Liens
2) Debts for necessities
3) Child Support/ Alimony

Question 7

Spendthrift Clause: What happens if it is pierced?

Answer 7

Regular asset protection rules will apply.

Question 8

Spendthrift Clause: What can traditionally be thrown in Spendthrift?

Answer 8

Spendthrift would only apply if the settlor was not the beneficiary, but anything.

Question 9

Spendthrift Clause: What modernly can be put in?

Answer 9

Look to the Cook Islands and the Self-Settled Asset Protection Act

Question 10

Spendthrift Clause: What does the Self-Settled Asset Protection Act Require?

Answer 10

1) Trustee in the state with the act.
2) Some property help in that same jurisdiction.
3) Trust is one that is irrevocable.
4) Trustee needs full discretion over the trust.

Question 11

Spendthrift Clause: Limits to Self-Settled Asset Protection Act?

Answer 11

• The jurisdiction needs substantial relation to the trust.
• The law where APT is and where the trust is can’t interfere with one another.

Question 12

Spendthrift Clause: Best ways to make Self-Settled Asset Protection Act Stronger?

Answer 12

Have a house in the jurisdiction.

Hold most of the trust assets in the jurisdiction.