Different areas of the law may intersect in certain cases. However, two that you might not assume to have much relevance to each other are estate planning and family law. You might be surprised to learn how often these different legal disciplines go hand-in-hand. Many who are beneficiaries to trusts often come to us here at The Law Offices of Alice A. Salvo wondering if their interests can be made available to creditors. The answer to that question in yes (in certain situations).
Typically, a settlor creates a trust in order to protect assets for beneficiaries. He or she may stipulate that assets generated from trust principle and income only be made available to beneficiaries at a certain future or date, or he or she may leave it to the trustee’s discretion of when to provide income for the benefit of a beneficiary. Some trust instruments may also endow beneficiaries with the power to compel trustees to provide them with income.
Beneficiaries may believe that the potential income available from a trust is shielded from creditors. Section 15305(a) of the California Trust Code, however, lists cases were a beneficiary owes a support judgment as one where it may intercede to access his or her interest in a trust on your behalf. In such a case, it can order that current or future income payments coming from a trust be used to satisfy a claim or spousal or child support. This law applies regardless of whether the beneficiary is allowed to compel the trustee to pay him or her, or such payments are determined by the trustee.
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