they please the court i represent the opponents here we're here because there were numerous errors in the lower court it began in the bankruptcy court five to carol's own attorney she was an inheritance from her father's the state there was no estate all assets pass through this trust there are two ways of dealing with this trust one way of dealing with it is saying it's a testamentary trust so we can say it's more like up we'll learn and irritants the other way is recognizing it's an interview  trust with the spendthrift clause if it's truly an interview those trust with the spendthrift clause it is excluded from the bankruptcy estate entire of if it's  two different standards there's two different ways of approaching it in this case because it was listed as an inheritance an exemption the bankruptcy trust motion to object the exemption instead of an adversary complaint against the trustee on the exclusion of the trustee assets that's the  first that was compound in the district court to come the confusion is also recognized by the court order in the bankruptcy court that was drafted by found they had the trust and it upon henry the surviving spouse the father's death that is an error because there are so many other duties th that the courts that wait a minute the trust doesn't automatically and upon the trust only and upon full administration or if there's a terminations clause in the trust in this case there is a terminations clause in the trust and that terminations lies this in paragraph eighty three and that's why twenty one years judge chang said that's a standard clause a rule against perpetuities and ignored it and said it had no come the judge also found in the district court that upon henry's death there was a quote outright distribution and quote kathy they had again was an error personable cathy had to survive her father for at least sixty days before she couldn't hear if she didn't survive for sixty days which nothing could pass to her she was deemed to be pretty just ceased there was a paragraph seventy seven in the trust says the trustee has the ability to withhold distribution for six months then there's a numerous paragraphs in the trust that said the trustee has discretion to administer the trust and make distributions pro rata or non program depending upon taxes depending upon what other income and pending upon other factors so it was not guaranteed that kathy hand a one third interest they could be distributed the day after her father's death it just didn't have the family bypass trust contains a spendthrift trust clause it is a valid spendthrift trust clause i don't think there's any doubt that the language used is very clear that it restricts the beneficiaries ability to alienate and the creditors ability to attach the trustee assets very clear the it's clear cathy carroll is merely a bennett to sherry of the trust the trust was settled by henry and mary anna in their lifetime it contained the marital trust the surviving spouse trust a q tip trust and the family by pastors and then third in the most important factor to determine whether or not a spendthrift clause is valid is whether the beneficiary has exclusive active dominion and control over the trust here it's obvious cathy has no control it it's not being distributed to or she could ask for it and be denied it because the trustee under the family bypass trust has  obligations and discretion to determine whether or not the funds should be distributed to the beneficiary finally there is a mention that the settlers had no intention that this fentress clause was to apply to children the only way the spendthrift clause was going to apply it was going to marital to trust in the surviving spouse trust in q two trust there is no spend per trust clause as there couldn't be because mariana and henry but their settlers of spendthrift trust could not apply to them it's obvious it was there to apply to the children i think the with the  says that this was her the wife's interest in the father's estate they exert an exemption into it the trustee filed a motion on the rule of bankruptcy law for thousand three objecting to that exemption the court sustain that and then that was appealed to the district court there's no need for an adversary proceeding in this case because all that is being decided is the interest between the trustee and the debtor we are not seeking any determination regarding the trust that this point which is what the adversary proceedings and so that would deal with when you need to sue a third party for a determination that this rule seven thousand one hero we are simply addressing whether or not the debtor has a right to assert in the exemption in the residue of the funds that they would receive from this family trust  in his recent pressure on it because that was what was brought forth in front of the court it when the attorneys in the bankruptcy court addressed the exemption issue they simply started bringing in five forty two five forty one eight two i believe which is the same that it's exempt because it's a spendthrift trust yes procedurally there's no exemption for a spendthrift trust it's either in the state or not the state but that's not the issue we're talking about we're talking about when she gets the my me from the trust does she get to keep that was should that money be turned over to creditors and again under four thousand and three if you don't file that exemption within thirty days of the three forty one meeting that exemption is deemed balance so the objection is the appropriate way to proceed  with respect to the question of if it's a spendthrift trust or not creditors debtors routinely will call things something that they aren't that's simply what the case is here she has a residue from a trust her father died she survived that father by sixty days and the rights of that trust she inherited that money maybe that's a bad term of art but that's what's been used here and that she would have a right to get that money from the trust council has gone on and they've talked about that there is broad discretion i disagree if you read the trust amended section forty five is clear that when henry the father died the trustee shall distribute the funds that there is no other reading with respect to that a spendthrift trust as mccoy has said is to provide maidens in support of another while protecting the beneficiary from squandering the principle and former own incapacity that's not what this truth nowhere does it said after henry dies the trust shall be poured over into a new trust that trustee shall have discretion to withhold principal and make distribution and make distributions for the benefit of the talk about supply and so find it was a very different case than this case so ponder there the court found that the trustee had discretion poured over funds into a new trust prior to the bankruptcy and there the trustee asserted under five forty eight a fraudulent transfer action trying to bring the funds back in the state again not the case here case here is whether or not when she receives the fund from the trust whether those funds belong in the debtors pocket or if they should go to pay creditors at the time she filed bankruptcy she had a right to turn to the trustee and say i have a right to these funds you need to distribute these funds to me the council has pointed out a section where they can the lay distribution for six months if you read that section that section says very clearly that even though there is a delay in distribution that still doesn't  affect the beneficiaries right that there was rights vested at the time that they should have vested in this case your honour's what happened is that sixty days after henry died katherine carroll was still alive she had a right to receive that distribution and even though she hasn't received it yet that right vested and therefore those rights belong to the trustee under five forty one he is the trustee has rights and any beneficiary interest that the debtors had at the time of the bankruptcy and those rights pass provisions we're talking about there's one provision that says she has the rights within sixty days right and therefore she has the right the trustee of the trust hand has discretion to not distribute for six months but they feels i appropriate but that section says that even though he delays that they have their rights still fast as of the time they would have had the right to those funds right it's my understand the reason why there hasn't been a distribution is because the assets aren't distribution or holding those funds those are questions that are being addressed in the bankruptcy court and on this court but there were funds they are available those some of those funds be held pending the outcome of this year again know just your arse a question about the six months and whether or not the bankruptcy was filed the bankruptcy was filed within those six months and de assets after the sixty days  after the sixty days and start after the sixty days after the sixty days but within the six months which allowed the trustee to hold those fun six months there were other provisions in the trust that we pointed out now three that allowed the trustee to either put the funds into another trust and  keep in a home with them or administer them instead of distributing them to the beneficiary and according to the trustees discretion he did not