transfer of beneficiary's trust

Question 1

spendthrift provision

Answer 1

Basically in every trust to protect B from themselves and from creditors

1. prevents B from using a future distribution to secure credit - AND -
   
   1. NOTE: once trustee pays B, B can transfer property received from trust
2. prevents creditors from reaching into trust to satisfy their claims
   
   1. NOTE: once trustee pays B, creditors can reach property

Question 2

limitations on enforcement of spendthirt provisions

Answer 2

1. self-settled spendthrift trust - ineffective if the S is the B
   
   1. this is when an S uses a SSST to protect their property from their own creditors. So, an S cannot be a B in a SSST for this reason
2. SSST cannot be used to shield the B against certain creditors
   
   1. judgments/ct. orders for child support, alimony
   2. claims by the govt

Question 3

what is the purpose of a self-settled spendthrift trust

Answer 3

public policy prevents you from protecting your property from your creditors

Question 4

under what rationale do some states now allow self-settled spendthrift trust

Answer 4

Domestic Asset Protection (DAPT)

• ppl were taking assets offshore so states decided to allow DAPTs so ppl at least keep their business in the states*
• if you see on bar say that normally states dont allow but some states are now permitting self-settled spendthrift trusts under DAPT*

Question 5

support trusts

Answer 5

directs trustee to pay only so much as necessary for B’s support ie for things like education

Question 6

what level of support if not indicated in a support trust?

Answer 6

what the B is already accustomed

Question 7

are the B’s other resources (ie income, assets etc) considered for what the B receives from support trust

Answer 7

should clarify in trust or else cts willl decide