F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

T O D D A

. F R

E A L Y , Attorney
, Chapter 7 Trustee of Estate of Rick Rey n olds, Appellant

,

v.

R I C K H. R E Y

N O L D S ; J O H

N M. C A R M A C K , Co-Trustee of the Rey nolds F amily

Trust and CoTrustee of The Rey

nolds F a mily Trust - Survivor’s Trust, as amended; J O H

N M O R R I S , CoTrustee of the Rey

nolds F amily Trust and Co-Trustee of The Rey nolds F amily

Trust - Survivor’s Trust, as amended,

A ppellees

. No. 12-60068

B AP No. 11-1433

ORDER CERTI F Y I

NG A QUESTI ON TO THE CAL I F ORNI A SUPREME COURT

F iled March 9, 2015

B e fore: Alex Koz inski and Susan P. Graber, Circuit J udg es, and Charles R. B rey er, Senior District J udg e. *

Per Curiam Order

* T h e Ho n o rab l e Ch arles R. B rey er, Sen io r District J u d g e f o r th e U

. S. District C o u

rt f o r th e No rth ern Distr i c t o f Calif o rn ia, sittin g b y d esig n atio n

.F R E A L Y V

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SUMMARY * *

Bankruptcy

The panel certified to the California S u p r e me Court the following question:

Does section 153 0 6 .5 of the California Probate Code impo s e an absolute cap of 25 percent on a bankruptcy estate’s a c ce ss to a beneficiary ’s interest in a spendthrift trust that consists entirely of pay

m e n ts from principal,

or may the bankruptcy estate reach more than 25 p e rcent u nder other sections of the Probate Code?

COUNSEL

J esse S. F inlay son (arg

ued), F inlay son Toffer Roosevelt & L illy L L P, I r vine, California, for Appellant.

David W

. Meadows (arg ued), L aw Offices of David W. Meadows, L os Ang eles, California, for Appellees.

** T h is su m m ary co n stitu

t es n o p ar t o f t h e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.F R E A L Y V

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ORDER

PER CURI AM:

This appeal r equires us to determine the ex tent to wh i ch

a bankruptcy estate ma y r e a c h a beneficiary ’s interest in a spendthrift trust under th e California Probate Code. The beneficiary claims that California Probate C o de section 15306.5 caps the bankruptcy estate’s a c cess at 25 percent of his trust interest, which c o nsis t s entirely of p a y ments from principal. The bankruptcy trustee, on the other hand, seeks to reach more than 25 percent of the beneficiary ’s interest under Probate Code sections 1 5301(b) and 15307, which it reads a s not subject to the section 15306.5 cap.

W e find no controlling precede n t i n the decisions of the California Supreme Court or Courts of A pp eal. S ee Cal. R. Ct. 8.548(a)(2) (permitting certification where there is “ no controlling p recedent” f rom the state c o u r t ); Sullivan v. Oracle Corp.
, 557 F .3d 979, 983 (9th Cir. 2009) (order) (looking to d ecisions of California appellate courts). Nor has

our court considered the interplay b e t w e e n section 15306.5 and other Probate Code sections g overning creditors’ access
to spendthrift trusts. We h e l d in Neuton v. Danning ( In re Neuton ), 9 22 F .2d 1379, 1383 (9th C i r

. 1990), that section 15306.5 allows a bank r u p tcy estate to reach 25 percent of a spendth r i f

t t r ust. B ut, unlike in the present case, the beneficiary in Neuton had arg ued that all of his interest in the spendthrift t r u st was protected from the bankruptcy estate, while the bankruptcy estate claimed o nly 25 percent under section 1 5306.5. Id. W e therefore had no occasion to

ex a mine whether a bankruptcy estate c ould access more than 25 percent under other Probate Code sections.F R E A L Y V

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A subst a n t i al sum of money hang s in the balance, as the beneficiary

stands to lose—and the bankruptcy estate stands to g ain—the entirety

of his trust interest. Their fate, and the fates of future beneficiaries a nd their creditors, hing es on the int e r pretation of opaque sections of the Probate Code. B ecause the resolution of t h i s appeal could transform the terrain of California trust law, we respectfully r equest that the California Supreme Court ex e rcise its discretion to accept a nd decide the certified question below.

I. Question Certif

ied

Pursuant to Rule 8.548 of the California Rules of Court,

we request that t h e California Supreme Court a nswer the following question:

Does section 1530 6 .5 of the California Probate Code impose an a bsol u te cap of 25 percent on a bankruptcy e s tate’s access to a beneficiary ’s interest in a spendthrift trust that consists entirely of pay

ments f rom pr i n cipal,

or may the bankruptcy estate reach more than 25 p e rcent under other sections of the Probate Code?

W e understand that the Court may r eformulate our question, and we agree to accept and follow the Court’s decision.

II. Background

A. Applicable Calif

ornia Statutes

The California Probate Code recog niz e s the v a lidity o f spendthrift provisions that restrict transfer of a beneficiary ’sF R E A L Y V

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interest in income and principal, so long a s that interest hasn’t
y et been paid to the beneficiary

. S ee Cal. Prob. Code §§ 15300, 15301(a). Section 15 3 0 1 ( a ) permits the restraint
ag ainst transfer of tr u st principal, subject to c ertain

ex c e ptions set forth in sections 15301(b) and 15304–07:

Ex cept as provi d e d in subdivision (b) and in Sections 15304 to 1 5 307, inclusive, if the trust instrument p rovides that a beneficiar y ’s interest in principal is not subject to voluntary

or involuntary transf

e r , the b eneficiary ’s interest i n p r incipal may n ot be transferred and is n ot subject to enforcement of a money judg ment until paid to the beneficiary

. Cal. Prob. Code § 15301(a).

One o f the s e ex ceptions, section 15306.5(a), a llows
g eneral creditors to satisfy money judg ments out of pay ments to which the beneficiary is entitled. The section provides:

Notwithstanding a restraint o n transfer of the beneficiary ’s interest in the t r ust under Sect i o n 1 5300 or 15301, and subject to the limitatio n s of this section, u pon a judg ment creditor’s petition u nder Section 70 9 .010 o f the Code of C i v i l Procedure, the court may make an order directin g t h e trustee to satisfy all or part of the judg ment out o f the pay ments to which the beneficia r y i s entitled under the
trust instrument or that the trustee, i n t h e

e x ercise of the trustee’s discretion, h a s determined or determines in the future to pay to the beneficiary

.F R E A L Y V

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Cal. Prob. Code § 15306.5(a). Creditors, upon petition to the

c o urt, may thus reach pay ments to which the beneficiary i s entitled subject to “the limitations of this section.” Id.

One of the limitations states as follows:

An order under t h is section may not require
t h a t the trustee pay in satisfaction of the judg ment an amount ex c eeding 25 percent of the p ay ment that otherwise would be made to, or for the benefit of, the beneficiary

.

Cal. Prob. Code § 1 5306.5(b). Along the same lines, section 15306.5(f) specifies that “the ag g r eg ate of a l l orders for satisfaction of money judg ments aga i n st the beneficiary ’s interest in the trust may n o t ex c eed 25 percent of the pay ment that otherwise would be made to, or f or the bene f

i t o f

, the beneficiary .” Cal. Prob. Code § 15306.5(f). Section 15306.5(c) further restricts creditors’ access, stati n g t h a t “ [a ] n order under this section may not require that t h e t r u stee pay in satisfaction of the judg ment a ny a mou n t t h a t the court determines is n ecessary for the support of the beneficiary a nd all the persons the b enefic i a ry is required to support.” Cal. Prob. Code § 15306.5(c).

Section 15301(b) contains another ex ceptio n to the general rule ag ainst transfer o f a spendthrift t r u s t beneficiary ’s interest in principal:

After an a mount of principal has become due and pay able to the beneficiary under the trust instrument, upon petit i o n to the court under Section 709.0 10 of the Code of Civil Procedure by a judg ment creditor, the courtF R E A L Y V

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may m a k e an order directing the trustee to

s a t isfy the money judg ment out of th at principal amount.

Cal. Prob. Code § 15301(b).

A n d section 15307, titled “I ncome in e x cess of amoun t for education and support; application to c r e d itors’ claim,”
states:

Notwithstanding a restraint on tran s f e r of a beneficiary ’s interest in the trust u n der Section 15300 or 15301, any amount to which th e beneficiary is entitled under the trust instrument or that the tr u s tee, in the ex e rcise of the trustee’s discr e t i on, has determined to pay to the beneficiary in e x cess of the amount that is or will be necessary f or the education and support of the beneficiary may be applied
to the satisfaction of a money judg ment ag ainst the beneficiary

. Upon th e judg ment creditor’s petit i on under Section 709.010 o f the Code of Civ i l P r ocedure, the court may make an order directin g t h e trustee to satisfy all or part of the ju d gment out of the beneficiary ’s interest in the trust.

Cal. Prob. Code § 15307.

Un like sections 15306.5, 15301(b) and 15307, which apply to g eneral creditors, the remaining ex cep t i o ns pertain
to eithe r p referred c reditors o r the unique situation in which the settlor of the trust is also a b eneficiary

. See Cal. Prob. Code § 15304 (invalidating the restraint ag ainst tran sferF R E A L Y V

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where the beneficiary is also the settl o r ) ; i d

. § 15305 (court
may order the trust to satisfy a m o n e y j u d g ment for support of the beneficiary ’s spouse, former spouse or minor child); id. § 1 5305.5 ( same, where there is a judg ment ag ainst t h e beneficiary awarding restitution for the commission o f a felony ); id. § 15306 (same, where the beneficiary is liable for reimbursement to the state o f California for p ublic support furnished to him or his spouse or minor child).

B. F acts Of

Our Case

Appellee Rick Rey

nolds is a beneficiary of the Rey nolds F amil y T rust, w hich contains the following spendthrift provision: “ No interest in the income or principal of any trust created under this instrument shall be voluntarily o r involuntarily anticipated, assig ned, encumbered, or subjected
to [ a] creditor’s cl a i m o r leg al process before actual r eceipt by the beneficiary .” The trust is co m p o s e d of three subtrusts—the B y

pass Trust, the Marital Trust and the Survivor’s Trust. Thirty day s after his father’s death in 2009, Rey nolds became e ntitled to $250,000 from the B y pass Trust, $100,000

a y ear for ten y ears from the Su rv i v o r’s Trust and one-third of the residue of the Survivor ’s T r u st thereafter. All, o r substantially all, of these distributions will be made from trust principal, as the trust a s s e t s are not ex pected to g enerate income.

The d ay after h is father died, Rey n olds filed a voluntary Chapter 7 b ankruptcy p e tition. The trust trustee subsequently filed an adversary proceeding asking the bankruptcy court to determ i n e w hat interest, if any , the bankruptcy estate h as. Rey nolds fil ed a motion for partial summary judg ment, arg uing that section 15306.5 limits t h e b ankruptcy estate to 25 percent of his interest in the spendthrift trust. TheF R E A L Y V

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bankruptcy trustee countered that the estate is entitled to more than 2 5 percent because section 15301(b) g iv e s creditors

u nrestricted access to distributions o f principal “due a n d
pa y a b l e , ” a

nd all of Rey

nolds’s distributions from the trust

were ex pected to be made f rom p rincipal. Alternatively

, the bankruptcy trustee arg ued that s e ction 15307 allows the bankruptcy estate to reach a n y amount of Rey nolds’s trust interest not d eemed necessary for his education and support. The b ankr

u p tcy trustee viewed sections 15306.5, 15301(b) and 15307 as independent routes that a creditor could use in
g aining access to a beneficiary ’s trust interest.

The bankruptcy court ruled in favor of Rey nolds a nd h eld that section 15306.5 establishes a n “absolute max imum cap

on what is recoverable by a judg ment creditor at 25 percent.” Althoug h it acknowledg ed that “[ t] h e r e may be an ex c eption
to [ the 25 percent cap] under 15301(b),” the cou r t “cho[ ] se not to follow that interpretation.” The bankruptcy court also rejected the arg ument that its reading rendered section 15307

s u p e r f l u o us, ex plaining that, under section 15307, “[ a creditor doesn’t] even necessarily g e t all of [ the 25 percent] if [ the
trust trustee] can show that [ tha t a m ount] is necessary for support.”

A divided Ninth Circuit B ankruptcy Appellate Panel affirmed the bankruptcy court, thoug h the maj o r i t y took a different approach. T h e BAP r ead section 15301(b) a s merely setting forth the procedure that a creditor must f ollow
to satisfy a claim from the principal o f a spendthrift trust once such principal i s p a y a b le but not y et distributed to the beneficiary

. I t refused to rea d s ection 15301(b) as allowing

a credit or to reach the entirety of p rincipal due and p ay able,

r e a soning that doing so would “ effectively eviscerate[ ] the spendthrift protection recogniz e d by 15301(a).” I t alsoF R E A L Y V

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pointed to the ex ceptions contained in sections 15304–07 as reflecting a “policy recog niti o n that certain creditors should have g reater rig hts to a benefi c i a r y ’s interest in order to satisfy their claims,” and noted that i t w o uld run counter to this policy

to read section 15301(b) as allowing any creditor to similarly

satisfy claims from trust principal.

I n considering section 15307, the B AP reasoned that, if secti o n s 15307 and 15306.5 were separate a venues for collection, “ 15306.5 would make no sen se: W hy would a judg ment credit o r ever choose to satisfy its claim under 15306.5, which is l imited not just by the 25% cap on the beneficiary ’s interest but by the n e e d s o f the debtor a nd his

or h er d ependents, when 15307 is only limited by the debtor’s

own educational and s u p port needs? ” The B A P concluded that section 15307 doesn’t apply to this case because the more plausible reading

, and the one most alig n e d w i th the leg islative intent, is that it only limits a credito r ’s access to income, and not principal.

The d issent, by contrast, “ d [ id] not believe the California leg islature intended that a debtor, without e x ception, should have a ccess to potentially l a rge distributions of cash from a trust not needed for his support or education in preference to the leg itimate cl a i m s o f his creditors.” I t v iewed sections 15301(b) and 1 5 3 0 7 as play ing a “ c ritical role in protecting credito rs’ rig hts” by allowing “ creditors, in some cases, to reach some, or perhaps e ven all,

. . . distributions” for which beneficiaries have “no leg itimate need.”

III. Explanation of

Certif ication

T h e b ankruptcy judg e in this case was correct in observing that “[ t] he Probate Code of the state of CaliforniaF R E A L Y V

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is any thing other than cry stal clear.” I t’s no surprise that both the bankruptcy court and the B AP strug g led to make sense o f the statutory scheme, with little to rely on b ut their o wn conceptions of the prop e r balance b etween the rig hts of a spendthrift trust beneficiary and those of his creditors.

As reflected in the assorted theories advanced by th e debtor, the bankruptcy trustee, the bankru p t cy court and the B AP m a j o rity and dissent, there is no obvious way to harmoniz e section 15306.5 with sections 15301(b) a nd 15307. B elow, we identify aspects of these sections that have proved challeng ing for us to decipher, and for which we seek authoritative g uidance.

1. Recall that sec t ion 15301(a) p ermits the restraint
ag ainst transfer of trust principal, subje c t t o ex ceptions “provided in subdivision (b) and in Sections 15304 to 15307.” Cal. Prob. Code § 15301(b). Section 15306.5 is one of these

ex c e ptions, but it’s not clear from its te x t w h e ther the 25
p e r c ent cap o n a creditor’s access to “pay ment[ s] that otherwi se w ould be made to, or for the benefit of, the beneficiary

” also applies to orders under other sections of the Probate Code. Cal. Prob. Code § 15306.5(b).

Se c tion 15306.5(b) sug g ests, for ex ample, that the 25 percent cap is limited to orders issued under section 15306.5,

as it states that “[ a] n order under this section may not require that the trustee pay in satisfaction o f the judg ment an amount

ex c e eding 25 percent of the pay ment that otherwise would be made to, or for the benefit o f, the be n e f i c i a r y .” Cal. Prob. Code § 15306.5(b) ( e mphasis added). B ut the “under this

s ection” phrasing is missing f r om subsection (f), w h i c h provides that “the ag g reg ate of all o rders for satisfaction o f

m o ney judg ments ag ainst the b eneficiary ’s interest in t h eF R E A L Y V

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trust may not ex ceed 25 percent of the pay ment that otherwise would be made to, or for the benefit of, the beneficiary .” Cal. Prob. Code § 15306.5(f). N or do the L aw Revision Co m mission’s comments elaborate when ex plaining that “[ s] ubdivision (f) limits the ag g r e ga te amount of the beneficiar y ’s interest in one trust that is subject to enforcement where several creditors have obtained o rd ers.” Cal. Prob. Co d e § 15306.5 L aw Revision Commission
comments.

2. A broader a mbig uity ex ists with respect t o s e ction 15301(b). I ts plain w o r d i n g does not specify a limit on the
amount of principal “ d

ue and p a y able” that a creditor may reach. I t simply states that, “[ a] fter an amo u n t o f principal has become d

ue and pay able to the beneficiary

. . . , the court may make an order directing the trustee to satisfy the money judg ment o ut of that principal am o u nt .” Cal. Prob. Code § 15301(b) (emphasis added). Reading se ction 15301(b) literally

, without any limitations on creditors’ access, raises a host of difficult questions.

At the o utset, section 15301(b) specifies that c reditors
may a ccess those principal amounts h eld within the trust only after they become “ due and pay able” to the beneficiary

. Cal. Prob. Code § 15301(b). B ut nowhere in the Probate Code is there a definition of “due and pay able.” One interpretation of “due and pay able” is that it encompasses all disbursements of principal owed to the b eneficiary

, reg ardless of the timing of disbursement. Section 15301(b) wo u l d therefore g ive creditors immediate access t o al l o f a beneficiary ’s trust principal. Another theory is that an a mount becom e s “ d ue and pay able” at the time the beneficiary is owed a disbursement—that is, when the only remaining step is for the
trust to w rite a check or otherwise effect the transfer of fundsF R E A L Y V

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to the beneficiar

y

. So c o nstrued, in Rey

nolds’s case, where he is entitled to annual pay ments of p rincipal continuing over t h e nex t d ecade, a creditor would b e unable to use sect i o n 15301(b) to r each the totality of his trust interest at one time; instead, the c reditor would have to wait until certain amounts

were ready for disbursement to petition the court f or access.

Under any d efinition of “due and pay able,” a l i t eral reading of section 15301(b) could g ive a judg ment c r e d itor

access to all trust p r i n c ipal, notwithstanding the limitations
set f or t h i n section 15306.5 or section 1 5307. And perhaps that makes sense—after all, it is, in essence, what already h appens: a spendthrift provision protects the beneficiary ’s income and principal interests only so “long as the income o r principal is properly held” in the tr u s t. Chatard v. Oveross
, 101 Cal. Rptr. 3d 883, 889 ( Ct. App. 2009). After the amount is paid t o t he beneficiary

, c reditors may reach it. Kelly v. Kelly

, 79 P.2d 1059, 1063 ( Cal. 1938); s e e a l s o Cal. Prob. Code §§ 15300, 15301(a).

That r e a d ing

, when viewed in lig ht of the a bsence of a similar provision in section 153 0 0
, also renders the Probate Code’s treatment of p rincip a l different from that of income: distributions of income are p rotected by the spendthrift provision until they r each the beneficiary

, while distributions of principal become fair g a me as s oon as they are “due a nd
pay able.” And that distinction also may make s ense— distributions of principal, for ex a mple, are more likely to be

a s s o c iated with the winding -down of a trust, as the beneficiary transitions to self-sufficiency

. Distributions o f income, by contrast, are intended to keep the bene f iciary
g oing from y ear to y ea r a n d t herefore may be desig ned to

e n sure that the beneficiary ’s most immediate needs are met.F R E A L Y V

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W h en considered in co n t e x t, however, reading section 15301(b) as an independent means o f accessing all principal

as it becomes due a n d p ay able creates some p u z z ling
consequences. F or ex ample, what purpose would sec t ion 1 5 3 0 6.5 serve? On one hand, section 15306.5 uses the a l l

encompassing word “ pay ments,” so it could also be read a s apply ing to princip a l due and pay able. See Cal. Prob. Code § 1 530 6 .5(a), (b), (f). W hy

, then, would the California leg islature craft a 25 percent c a p and emphasiz e that it applies in the ag g reg a te, if creditors could by pass this protection b y using section 15301(b) to access the entirety of p rincipal d ue and pay able? I t’s als o unclear, under that reading

, why the leg islature would specify that creditors may not access amounts “necessary for the support of the beneficiary and all the persons the benef

i c i a r y is required to support,” see Cal. Prob. Code § 15306.5(c), if creditors could turn to s e c tion 15301(b ) to potentially drain the e n tirety of a beneficiary ’s
trust interest, when that interest c onsists of principal due a nd
pay able. On the o ther h and, section 15 3 06.5 refers to all
pay ments, current and

future

, of principal and income. Thus, perhaps section 15306.5 ex ists not as a c a p on pay ments o f principal o therwise a ccessible throug h section 15301(b), but instead as a limit on a creditor’s ability to obtain a standing

, g eneral percentag e share of the beneficiary ’s trust pay ments, current and future.

Similarly

, if section 15301(b) p ermits g eneral c reditors to

access all principal d

ue and pay able, what b eco m e s o f the

ex c e ptions in sections 15304– 0 7 giving access to preferred creditors? Could the bankruptcy trustee or any u n secured credit o r d e plete the entirety of the trust interest when it

con s i sts of principal due a nd pay able, leaving none f or the preferred creditors contemplated in sections 15305, 15305.5 and 15306? Section 15301(b) states that “ [a] fter an amountF R E A L Y V

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o f principal has b ecome due and pay able

. . . , upon petit i o n to the court

. . . , the court m ay m a k e an order directing the
trustee to satisfy the money ju d gm e n t out of that principal amount.” Cal. Prob. Code § 15301(b) (emphasis added). B y contrast, sections 15305, 15305.5 and 15306 don’t c ontain
any lang uag e requiring preferred creditors to wait u ntil a certain time to petition the court for an order

. Thus, if the
sequen c e i n w hich a c ourt order is issued determines the timing of pay

ments—an assumption lacking clear support from the Probate C o d e—preferred creditors may retain priority over a section 1 5301(b) creditor in a ccessing principal due and pay

able.

3. The final ambig uity arises under section 15307, which

can be r e a d a s apply ing e ither to both income and principal,

or only to income. I ts title, “I ncome in ex cess of amount for education and support; applicatio n to creditors’ claim,”
sug g ests the latter. T he leg islative history also supports this interpretation. See, e.g. , Cal. Prob. Code § 15307 L aw Revision Commission comments (ex plaining that “[ s] ection 15307 permits an ordinary creditor to reach i ncome under limited circumstances” and further discussing “the creditor’s attempt to reach the ex cess income under this section”). I n addition, California Civil C o de section 859, which was

r epealed and replaced by California Probate Code section 15307, ex c lusively g overned income. S e e United Cal. Bank

v. Lawrence (

I n re Estate of Lawrence )

, 72 Cal. Rptr. 851, 854–55 (Ct. App. 1968). However, the tex t of section 15307 does not mention income and instead r e f ers g enerally to “any
amount to which the beneficiary is entitled.” Cal. Prob. Code § 15307. Also, the first sentence beg ins, “Notwithstanding a restrain t on transfer of a beneficiary ’s interest in the trust under Sec t i o n 15300 [ g overning income] o r 15301F R E A L Y V

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[ g overn i n g principal] ,” which supports apply ing section 15307 to both income and principal. Id.

I f section 1 5307 pertains only to income, then it h a s no application in this case. B ut if it e x t e n d s to principal, many of the same questions raised above arise. Section 1 5307, like section 1 5301(b), does not ex plicitly refer to section 15306.5

or any of the o ther ex ceptions listed in section 15301(a), a nd it could b e r e a d l i t erally to g ive a creditor access to the entirety of a beneficiary ’s trust interest so long as n one of it is deemed neces s a r y f

o r his e ducation and support. W hat
purpose, then, would sections 1 5 3 01(b) and 15306.5 serve? S ec t i o n 1 5307 would b e duplicative o f a creditor’s rig ht to petition f or distributions of principal under section 15301(b). And, depending on the m e a n i n g o f section 15306.5 (which remains unclear), section 1 5 3 0 7 could directly conflict with—and create an end-run around—the 25 percent cap set forth in section 15306.5. I s the Pro b a t e Code meant to f unction a s a menu from w hich creditors may sel e c t t h e sections they want to invoke in order to reach the max imum
amount of a beneficiary ’s interest in a spendthrift trust? And, if so, what would remain o f the p r o t e c t i ons afforded to the beneficiary ?

The answers to these questions have sig nificant

r a m i f ications, not just for the immediate parties, but for the administration of all spendthrift trusts in Californi a. A s it currently stand s, the Probate Code is subject to two vastly different r eading s: one g iving creditors unfe t t e r e d access to

a beneficiary ’s interest i n t h e trust, and another restricting creditors’ a ccess to 25 percent. W e are reluct ant to decide which reading prevails without the authoritative g uidance o f the California Supreme Court. We therefore ask the Court toF R E A L Y V

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ex e r cise its disc r e t i o n and decide the a ppropriate deg ree to which creditors may

access spendthrift trusts.

IV. Adm inistrative Inf orm ation

The names and addresses of counsel for the parties are a s follows:

Counsel for Appellant Todd A. Frealy:

J esse Sequoia F inlay son Matthew E. L illy F inlay son Toffer Roosevelt & L illy L L P 15615 Alton Parkway I rvine, CA 92618

Co u nsel for Appellees R ick H. Reynolds, John M. Carmack and John Morris:

David Meadows, Attorney L aw Offices of David W

. Meadows 1801 Century

Park East L os Ang eles, CA 90067

J oseph A. Eisenberg Thomas M. Geher J effer Mang e ls B utler & Marmaro L L P 1900 Avenue of the Stars L os Ang eles, CA 90067

F realy should be de emed the petitioner if the California Supreme Court accepts this r equest. Cal. R. Ct. 8 .548(b)(1).F R E A L Y V

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N O L D S 18

The Clerk of this court shall submit copies of all relevant b r iefs and an orig inal and ten c o pies o f this Order to t h e California Supreme Court with a certificate of service on the parties. See Cal. R. Ct. 8.548(c), (d). All further proceeding s bef o re us are stay ed pending r eceipt of the California Supreme Court’s decision. The parties shall notify the Clerk of this c ourt w ithin one week after the California S u p r eme Court accepts or declines this request, a nd ag ain within o ne week after it renders its decision.

IT IS SO ORDERED.