(a)Notwithstanding a restraint on transfer of the beneficiary’s interest in the trust under Section 15300 or 15301, and subject to the limitations of this section, upon a judgment creditor’s petition under Section 709.010 of the Code of Civil Procedure, the court may make an order directing the trustee to satisfy all or part of the judgment out of the payments to which the beneficiary is entitled under the trust instrument or that the trustee, in the exercise of the trustee’s discretion, has determined or determines in the future to pay to the beneficiary.
(b)An order under this section may not require that the trustee pay in satisfaction of the judgment an amount exceeding 25 percent of the payment that otherwise would be made to, or for the benefit of, the beneficiary.
(c)An order under this section may not require that the trustee pay in satisfaction of the judgment any amount that the court determines is necessary for the support of the beneficiary and all the persons the beneficiary is required to support.
(d)An order for satisfaction of a support judgment, as defined in Section 15305, has priority over an order to satisfy a judgment under this section. Any amount ordered to be applied to the satisfaction of a judgment under this section shall be reduced by the amount of an order for satisfaction of a support judgment under Section 15305, regardless of whether the order for satisfaction of the support judgment was made before or after the order under this section.
(e)If the trust gives the trustee discretion over the payment of either principal or income of a trust, or both, nothing in this section affects or limits that discretion in any manner. The trustee has no duty to oppose a petition to satisfy a judgment under this section or to make any claim for exemption on behalf of the beneficiary. The trustee is not liable for any action taken, or omitted to be taken, in compliance with any court order made under this section.
(f)Subject to subdivision (d), the aggregate of all orders for satisfaction of money judgments against the beneficiary’s interest in the trust may not exceed 25 percent of the payment that otherwise would be made to, or for the benefit of, the beneficiary.
Notes of Decisions
In re Herbert M. Zukerkorn Jennifer Zukerkorn, 484 B.R. 182 (B.A.P. 9th Cir. 2012).
· cites it 22× “19 3 Cal. Prob. Code § 15306.5 provides in relevant part: 20 (a) Notwithstanding a restraint on transfer of the 21 beneficiary’s interest in the trust under Section 15300 or 15301, and subject to the limitations of this 22 section, upon a judgment creditor’s petition under…”
Todd Frealy v. Rick Reynolds, 779 F.3d 1028 (9th Cir. 2015).
· cites it 11× “ORDER CERTIFYING A QUESTION TO THE CALIFORNIA SUPREME COURT ORDER PER CURIAM: This appeal requires us to determine the extent to which a bankruptcy estate may reach a beneficiary’s interest in a spendthrift trust under the California Probate Code. The beneficiary claims that…”
Carmack v. Reynolds, 391 P.3d 625 (Cal. 2017).
“The Ninth Circuit asked us whether the Probate Code limits a bankruptcy estate's access to a spendthrift trust to 25 percent of the beneficiary's interest, where the trust pays the beneficiary entirely out of principal.”
Bendon v. Reynolds (In Re Reynolds), 479 B.R. 67 (B.A.P. 9th Cir. 2012).
· cites it 5× “2d at 1383 , citing Cal. Prob. Code § 15306.5 (b). 28 However, “any amount that the court determines is necessary for 12 1 the support of the beneficiary and all the persons the 2 beneficiary is required to support” is exempt from the payments 3 to which a creditor would be…”
Cisneros v. Kim (In Re Kim), 257 B.R. 680 (B.A.P. 9th Cir. 2000).
· cites it 2× “”) Nonetheless, the California Probate Code has limited the scope of the spendthrift protection.”
Cutter v. Seror (In Re Cutter), 398 B.R. 6 (B.A.P. 9th Cir. 2008).
· cites it 2× “Unlike Trustee here, the Neuton bankruptcy trustee was seeking to recover 25 percent of a debtor’s income from a spendthrift trust pursuant to California Probate Code section 15306.5 (whereby a creditor may obtain an order allowing it to recover up to 25 percent of payments to…”
Ammco Ornamental Iron, Inc. v. Wing, 26 Cal. App. 4th 409 (Cal. Ct. App. 1994).
· cites it 3× “010; 1 Prob. Code, § 15306.5.) The petition sought an order directing the trustee of the trust to withhold certain amounts from sums distributable to Wing and to pay those amounts to Ammco until the judgment was satisfied.”
Zimmermann v. Spencer (In Re Spencer), 306 B.R. 328 (Bankr. C.D. Cal. 2004).
· cites it 2× “Based on this, the Court finds the Schmitt distinction between revocable and irrevocable trusts an important consideration in determining that a beneficial contingent *333 interest does not exist on the date of the petition.”
Pratt v. Ferguson, 3 Cal. App. 5th 102 (Cal. Ct. App. 2016).
“(Prob. Code, § 15306.5, subds. (a), (b).) Discretionary payments that the trustee makes to the judgment debtor beneficiary in excess of the amount necessary for the beneficiary’s education and support are subject to such a judgment lien.”
Chatard v. Oveross, 179 Cal. App. 4th 1098 (Cal. Ct. App. 2009).
“The probate court should be able to enforce the surcharge order in the context of administering the trust without requiring the parties to go to the time and expense of complying with statutes that essentially address the ability of a third party creditor to reach a…”
Garrett v. Finley (In Re Finley), 286 B.R. 163 (Bankr. W.D. Wash. 2002).
“Cal. Prob.Code § 15306.5. The Ninth Circuit concluded that the bankruptcy trustee could reach 25% of the beneficiary’s interest under 11 U.”
Todd Frealy v. Rick Reynolds, 867 F.3d 1119 (9th Cir. 2017).
“) Probate Code section 15306.5 appears to limit the bankruptcy estate to 25 percent of the henefieiary’R interest; other provisions of the Probate Code suggest no such limitation.”
Cal. Probate Code § 15306.5(a): 1 case
Todd Frealy v. Rick Reynolds, 779 F.3d 1028 (9th Cir. 2015).
“ORDER CERTIFYING A QUESTION TO THE CALIFORNIA SUPREME COURT ORDER PER CURIAM: This appeal requires us to determine the extent to which a bankruptcy estate may reach a beneficiary’s interest in a spendthrift trust under the California Probate Code. The beneficiary claims that…”
Cal. Probate Code § 15306.5(b): 2 cases
Todd Frealy v. Rick Reynolds, 779 F.3d 1028 (9th Cir. 2015).
“ORDER CERTIFYING A QUESTION TO THE CALIFORNIA SUPREME COURT ORDER PER CURIAM: This appeal requires us to determine the extent to which a bankruptcy estate may reach a beneficiary’s interest in a spendthrift trust under the California Probate Code. The beneficiary claims that…”
Bendon v. Reynolds (In Re Reynolds), 479 B.R. 67 (B.A.P. 9th Cir. 2012).
“2d at 1383 , citing Cal. Prob. Code § 15306.5 (b). 28 However, “any amount that the court determines is necessary for 12 1 the support of the beneficiary and all the persons the 2 beneficiary is required to support” is exempt from the payments 3 to which a creditor would be…”
Cal. Probate Code § 15306.5(c): 4 cases
Todd Frealy v. Rick Reynolds, 779 F.3d 1028 (9th Cir. 2015).
“ORDER CERTIFYING A QUESTION TO THE CALIFORNIA SUPREME COURT ORDER PER CURIAM: This appeal requires us to determine the extent to which a bankruptcy estate may reach a beneficiary’s interest in a spendthrift trust under the California Probate Code. The beneficiary claims that…”
In re Herbert M. Zukerkorn Jennifer Zukerkorn, 484 B.R. 182 (B.A.P. 9th Cir. 2012).
“19 3 Cal. Prob. Code § 15306.5 provides in relevant part: 20 (a) Notwithstanding a restraint on transfer of the 21 beneficiary’s interest in the trust under Section 15300 or 15301, and subject to the limitations of this 22 section, upon a judgment creditor’s petition under…”
Zimmermann v. Spencer (In Re Spencer), 306 B.R. 328 (Bankr. C.D. Cal. 2004).
“Based on this, the Court finds the Schmitt distinction between revocable and irrevocable trusts an important consideration in determining that a beneficial contingent *333 interest does not exist on the date of the petition.”
Bendon v. Reynolds (In Re Reynolds), 479 B.R. 67 (B.A.P. 9th Cir. 2012).
“2d at 1383 , citing Cal. Prob. Code § 15306.5 (b). 28 However, “any amount that the court determines is necessary for 12 1 the support of the beneficiary and all the persons the 2 beneficiary is required to support” is exempt from the payments 3 to which a creditor would be…”
Cal. Probate Code § 15306.5(f): 1 case
Todd Frealy v. Rick Reynolds, 779 F.3d 1028 (9th Cir. 2015).
“ORDER CERTIFYING A QUESTION TO THE CALIFORNIA SUPREME COURT ORDER PER CURIAM: This appeal requires us to determine the extent to which a bankruptcy estate may reach a beneficiary’s interest in a spendthrift trust under the California Probate Code. The beneficiary claims that…”
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