Opinion ID: 541990
Heading Depth: 2
Heading Rank: 1

Heading: The Spendthrift Trusts

Text: 3 The two express spendthrift trusts at issue are identical for all relevant purposes. Each provides that the trustee shall distribute net income or portions of the corpus to Newman until he reaches age 50 as needed in the trustee's discretion for the debtor's education, maintenance, comfort, and support. Trust Art. VII, Appellee's App. at 13. When Newman turns 50, the trust herein created shall terminate and the trustee shall distribute to [Newman] the assets of the trust estate, absolutely and free from trust. Trust Art. I, Sec. C, Appellee's App. at 2. Until that time, however, neither the corpus nor the income of the trust estate shall be liable for 4 the debts of any beneficiary thereof, nor shall the same be subject to seizure by any creditor of any beneficiary under any writ or proceeding at law or in equity, and no beneficiary shall have the right or power to give, sell, assign, transfer, pledge, mortgage, or in any other manner dispose of, encumber, or anticipate his or her interest in the income or corpus of any trust estate,   . Trust Art. VII, Appellee's App. at 13 (emphasis added). 5 This case does not involve the oft-contested desirability or validity of the alienation-restricting device known as the spendthrift trust. See G.G. Bogert & G.T. Bogert, The Law of Trusts and Trustees Sec. 222 (rev. 2d ed. 1979); Eaton v. Boston Trust Co., 240 U.S. 427, 429, 36 S.Ct. 391, 392, 60 L.Ed. 723 (policy in Massachusetts law favoring protection of spendthrift trusts must be respected in bankruptcy context, [w]hatever may have been the criticisms upon the policy and soundness of the doctrine) (Holmes, J.). The trustee in bankruptcy does not question the validity of the spendthrift trusts at issue under Missouri law, which is the applicable legal standard (Appellant Br. at 4). Instead the issue to be decided centers upon the specific import of these spendthrift trusts and the application of 11 U.S.C. Sec. 541 to determine what qualifies as property of the estate of the debtor for the purposes of the bankruptcy proceeding.