Ohio Rev. Code » Chapter 5805
Ohio Revised Code

Ohio Rev. Code § 5805.06 (2026)

Rights of settlor's creditors - power of withdrawal

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Effective:
August 17, 2021
Latest Legislation:
House Bill 7 - 134th General Assembly
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(A) Whether or not the terms of a trust contain a spendthrift provision, all of the following apply:

(1) During the lifetime of the settlor, the property of a revocable trust is subject to claims of the settlor's creditors.

(2) Except to the extent that a trust is established pursuant to, or otherwise is wholly or partially governed by or subject to Chapter 5816. of the Revised Code, 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. If an irrevocable trust has more than one settlor, the amount distributable to or for a settlor's benefit that the creditor or assignee of a particular settlor may reach may not exceed that settlor's interest in the portion of the trust attributable to that settlor's contribution. The right of a creditor or assignee to reach a settlor's interest in an irrevocable trust shall be subject to Chapter 5816. of the Revised Code to the extent that that chapter applies to that trust.

(3) With respect to a trust described in 42 U.S.C. section 1396p(d)(4)(A) or (C), the court may limit the award of a settlor's creditor under division (A)(1) or (2) of this section to the relief that is appropriate under the circumstances, considering among any other factors determined appropriate by the court, the supplemental needs of the beneficiary.

(B) For purposes of this section, all of the following apply:

(1) The holder of a power of withdrawal is treated in the same manner as the settlor of a revocable trust to the extent of the property subject to the power during the period the power may be exercised.

(2) None of the following shall be considered an amount that can be distributed to or for the benefit of the settlor:

(a) Trust property that could be, but has not yet been, distributed to or for the benefit of the settlor only as a result of the exercise of a power of appointment held in a nonfiduciary capacity by any person other than the settlor;

(b) Trust property that could be, but has not yet been, distributed to or for the benefit of the settlor of a trust pursuant to the power of the trustee to make distributions or pursuant to the power of another in a fiduciary capacity to direct distributions, if and to the extent that the distributions could be made from trust property the value of which was included in the gross estate of the settlor's spouse for federal estate tax purposes under section 2041 or 2044 of the Internal Revenue Code or that was treated as a transfer by the settlor's spouse under section 2514 or 2519 of the Internal Revenue Code;

(c) Trust property that, pursuant to the exercise of a discretionary power by a person other than the settlor, could be paid to a taxing authority or to reimburse the settlor for any income tax on trust income or principal that is payable by the settlor under the law imposing the tax.

Last updated May 20, 2021 at 2:22 PM

Notes of Decisions
Cited in 5 cases (1 in the last 5 years), 2008–2022 · leading case: Sowers v. Luginbill, 889 N.E.2d 172 (Ohio Ct. App. 3d Dist. 2008).
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Sowers v. Luginbill, 889 N.E.2d 172 (Ohio Ct. App. 3d Dist. 2008). · cites it 10× “This scenario defeats the purpose of R.C. 5805.06, which was drafted, in part, to protect creditors from the use of trusts to protect assets from legitimate claims.”
Fahey Banking Co. v. Carpenter, 2019-Ohio-679. · cites it 10× “) {¶ 9} Fahey contends that R.C. 5805.06 controls and permits the injunction and attachment, despite the valid spendthrift provision.”
In re Starr, 485 B.R. 835 (Bankr. N.D. Ohio 2012). · cites it 2× “) Under Bank’s argument, the trust corpus, including the real estate, is property of the estate by virtue of O.R.C. § 5805.06(A)(1), which provides that trust property in a revocable trust remains subject to creditor claims.”
Individual Bus. Servs. v. Carmack, 2011-Ohio-1824. · cites it 2× “However, R.C. 5805.06, which was enacted in 2006, provides that: {¶ 58} “(A) Whether or not the terms of a trust contain a spendthrift provision, all of the following apply: {¶ 59} “(1) During the lifetime of the settlor, the property of a revocable trust is subject to claims of…”
Teresa Nadeau, No. 21-31239, 2022 WL 4542768 (Bankr. N.D. Ohio Sept. 28, 2022). · cites it 2× “, Ohio Rev. Code §5805.06(A)(1)(“During the lifetime of the settlor, the property of a revocable trust is subject to claims of the settlor’s creditors.”
Ohio Rev. Code § 5805.06(A): 1 case
Fahey Banking Co. v. Carpenter, 2019-Ohio-679. “) {¶ 9} Fahey contends that R.C. 5805.06 controls and permits the injunction and attachment, despite the valid spendthrift provision.”
Ohio Rev. Code § 5805.06(A)(1): 4 cases
Sowers v. Luginbill, 889 N.E.2d 172 (Ohio Ct. App. 3d Dist. 2008). “This scenario defeats the purpose of R.C. 5805.06, which was drafted, in part, to protect creditors from the use of trusts to protect assets from legitimate claims.”
In re Starr, 485 B.R. 835 (Bankr. N.D. Ohio 2012). “) Under Bank’s argument, the trust corpus, including the real estate, is property of the estate by virtue of O.R.C. § 5805.06(A)(1), which provides that trust property in a revocable trust remains subject to creditor claims.”
Fahey Banking Co. v. Carpenter, 2019-Ohio-679. “) {¶ 9} Fahey contends that R.C. 5805.06 controls and permits the injunction and attachment, despite the valid spendthrift provision.”
Teresa Nadeau, No. 21-31239, 2022 WL 4542768 (Bankr. N.D. Ohio Sept. 28, 2022). “, Ohio Rev. Code §5805.06(A)(1)(“During the lifetime of the settlor, the property of a revocable trust is subject to claims of the settlor’s creditors.”
Ohio Rev. Code § 5805.06(A)(2): 1 case
Sowers v. Luginbill, 889 N.E.2d 172 (Ohio Ct. App. 3d Dist. 2008). “This scenario defeats the purpose of R.C. 5805.06, which was drafted, in part, to protect creditors from the use of trusts to protect assets from legitimate claims.”
Ohio Rev. Code § 5805.06(A)(l): 1 case
Sowers v. Luginbill, 889 N.E.2d 172 (Ohio Ct. App. 3d Dist. 2008). “This scenario defeats the purpose of R.C. 5805.06, which was drafted, in part, to protect creditors from the use of trusts to protect assets from legitimate claims.”
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