Trusts – Spendthrift trusts

Trusts – Spendthrift trusts

§2002. Restraint upon alienation. The trust instrument may provide that the interest of a beneficiary shall not be subject to voluntary or involuntary alienation by a beneficiary. A restraint upon voluntary alienation by a beneficiary is valid. But a restraint upon involuntary alienation by a beneficiary is subject to the limitations prescribed by this sub-part.

§2004. Seizure by creditor; general rule. A creditor may seize only:

(1) An interest in income or principal that is subject to voluntary alienation by a beneficiary.

(2) A beneficiary’s interest in income and principal, to the extent that the beneficiary has donated property to the trust, directly or indirectly. A beneficiary will not be deemed to have donated property to a trust merely because he fails to exercise a right of withdrawal from the trust.

§2005. Seizure by creditor; special claims. Notwithstanding any stipulation in the trust instrument to the contrary, the proper court, in summary proceedings to which the trustee, the beneficiary, and the beneficiary’s creditor shall be parties, may permit seizure of any portion of the beneficiary’s interest in trust income and principal in its discretion and as may be just under the circumstances if the claim is based upon a judgment for:

(1) Alimony, or maintenance of a person whom the beneficiary is obligated to support;

(2) Necessary services rendered or necessary supplies furnished to the beneficiary or to a person whom the beneficiary is obligated to support; or

(3) Damages arising from a felony criminal offense committed by the beneficiary which results in a conviction or a plea of guilty.