Section 505. Creditor's claim against settlor
(a) Whether or not a trust contains a spendthrift provision, the following rules shall apply:
(1) During the lifetime of the settlor, the property of a revocable trust shall be subject to claims of the settlor's creditors.
(2) With respect to an irrevocable trust, a creditor or assignee of the settlor may reach the maximum amount that can be distributed to or for the settlor's benefit and, if a trust has more than 1 settlor, the amount the creditor or assignee of a particular settlor may reach may not exceed the settlor's interest in the portion of the trust attributable to that settlor's contribution. Trust property shall not be considered distributable to or for the settlor's benefit solely because the trustee has the discretion under the terms of the trust to reimburse the settlor for any tax on trust income or capital gain that is payable by the settlor under the law imposing such tax; no creditor or assignee of the settlor of an irrevocable trust shall be entitled to reach any trust property based on the discretionary authority described in this sentence.
(3) After the death of a settlor, and subject to the settlor's right to direct the source from which liabilities will be paid, the property of a trust that was revocable at the settlor's death shall be subject to claims of the settlor's creditors, the expenses of the settlor's funeral and disposal of remains and statutory allowances to a surviving spouse and children to the extent the settlor's probate estate is inadequate to satisfy those claims, expenses and allowances.
[There is no subsection (b).]
Notes of Decisions
Cited in
5
cases, 2018–2019 · leading case:
Calhoun v. Rawlins, 106 N.E.3d 684 (Mass. App. Ct. 2018).
Calhoun v. Rawlins, 106 N.E.3d 684 (Mass. App. Ct. 2018).
· cites it 4× “On appeal, KeyBank and Jean "do not quibble with this well-established principle" applicable to self-settled trusts, and even agree that the motion judge correctly applied G. L. c. 203E, § 505( a )(2), in concluding that the funds contributed to the trust by McInerney from his…”
De Prins v. Michaeles, 942 F.3d 521 (1st Cir. 2019).
· cites it 2× “3d 1 , 14 3 De Prins argues that Michaeles waived any argument related to Mass. Gen. Laws ch. 203E, § 505 by not making it to the district court.”
De Prins v. Michaeles, 342 F. Supp. 3d 199 (2018).
· cites it 2× “Here, as in Calhoun , the proper application of G. L. c. 203E, § 505( a )(2) allows the Plaintiff to access the Trust on the facts and circumstances of this case.”
DePrins v. Michaeles (D. Mass. 2018).
· cites it 2× “140 § 56, which provides that notwithstanding the presence of a spendthrift provision, “[w]ith respect to an irrevocable trust, a creditor or assignee of the settlor may reach the maximum amount that can be distributed to or for the settlor’s benefit.”
DePrins v. Michaeles (D. Mass. 2018).
· cites it 2× “140 § 56, which provides that notwithstanding the presence of a spendthrift provision, “[w]ith respect to an irrevocable trust, a creditor or assignee of the settlor may reach the maximum amount that can be distributed to or for the settlor’s benefit.”
Mass. Gen. Laws ch. 203E, § 505(a)(2): 3 cases
De Prins v. Michaeles, 342 F. Supp. 3d 199 (2018).
“Here, as in Calhoun , the proper application of G. L. c. 203E, § 505( a )(2) allows the Plaintiff to access the Trust on the facts and circumstances of this case.”
DePrins v. Michaeles (D. Mass. 2018).
“140 § 56, which provides that notwithstanding the presence of a spendthrift provision, “[w]ith respect to an irrevocable trust, a creditor or assignee of the settlor may reach the maximum amount that can be distributed to or for the settlor’s benefit.”
DePrins v. Michaeles (D. Mass. 2018).
“140 § 56, which provides that notwithstanding the presence of a spendthrift provision, “[w]ith respect to an irrevocable trust, a creditor or assignee of the settlor may reach the maximum amount that can be distributed to or for the settlor’s benefit.”
Mass. Gen. Laws ch. 203E, § 505(a)(3): 1 case
De Prins v. Michaeles, 942 F.3d 521 (1st Cir. 2019).
“3d 1 , 14 3 De Prins argues that Michaeles waived any argument related to Mass. Gen. Laws ch. 203E, § 505 by not making it to the district court.”
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