Spendthrift, Support and Discretionary Trusts

Question 1

Spendthrift Trust

Answer 1

Trust says B can’t transfer his right and creditors can’t attach

• B Tx: gen no, but some allow as mere direction to pay someone else (revocable)
• Cred Att: gen no, but yes re preferred creditors (gov’t, necessities, kids, spouse); some say any creditor can attach to surplus over ben’s station in life

Question 2

Support Trust

Answer 2

Trust says T must use for Ben’s health/support

B Tx: no bc kills T’s intent

Cred Att: gen no, but yes re preferred creditors (gov’t, necessities, kids, spouse); some say any creditor can attach to surplus over ben’s station in life

Question 3

Spendthrift/Support Trust for Settlor’s Benefit

Answer 3

S Tx: most ignore restrictions, but some will enf. to protect S from self

Cred Att: most ignore restrictions because can’t insulate self from liability, but some will enf.

Question 4

Discretionary Trust

Answer 4

T has sole and absolute discretion

-B Tx: gen no (what is being transferred), but if T gets notice of assignment, T must pay assignee or personally liable

Cred Att: gen no (attach to what), but if T gets notice of judgment, must pay creditor or personal liable