Bankruptcy’s Spendthrift Trust Exception: Mandatory or Permissive?

February 10, 2017

Estate planning attorneys work tirelessly for their clients, taking into account myriad complex issues. Despite these efforts, even the best-laid plans can be adversely affected when a beneficiary files for bankruptcy. As the debtors discovered in Scott v. King (In re Amerson), 839 F.3d 1290 (10th Cir. 2016), the existence of a valid spendthrift trust does not necessarily prevent the debtor’s beneficial interest from being included in his or her bankruptcy estate for the benefit of creditors.

Reprinted with permission from the Daily Journal. © 2017 Daily Journal Corporation. All rights reserved.

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James P. Menton, Jr.

Partner

Co-Chair, Corporate Restructuring and Bankruptcy Group

Kevin Meek

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