130.315 UTC
505. Creditor’s claim against settlor.
(1) Whether or not the terms of a trust contain a spendthrift provision, except
as provided in ORS 130.518:
(a) During the
lifetime of the settlor, the property of a revocable trust is subject to claims
of the settlor’s creditors.
(b) A creditor or
assignee of the settlor of an irrevocable trust 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 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.
(c) If a trust
was revocable at the settlor’s death, the property of the trust becomes subject
to creditors’ claims as provided in ORS 130.350 to 130.450 when the settlor
dies. The payment of claims is subject to the settlor’s right to direct the
priority of the sources from which liabilities of the settlor are to be paid.
(d)
Notwithstanding the provisions of paragraph (b) of this subsection, the assets
of an irrevocable trust may not be subject to the claims of an existing or
subsequent creditor or assignee of the settlor, in whole or in part, solely
because of the existence of a discretionary power granted to the trustee by the
terms of the trust or any other provision of law to pay the amount of tax owed
directly to the taxing authorities or to reimburse the settlor for any tax on
trust income or principal that is payable or has been paid by the settlor under
the law imposing the tax.
(2) For the
purpose of creditors’ claims, the holder of a power of withdrawal is treated in
the same manner as the settlor of a revocable trust to the extent property of
the trust is subject to the power. The provisions of this subsection apply to
the holder of a power of withdrawal only during the period that the power may
be exercised.
(3) Upon the
lapse, release or waiver of a power of withdrawal, the property of the trust
that is the subject of the lapse, release or waiver becomes subject to claims
of creditors of the holder of the power only to the extent the value of the
property exceeds the greatest of:
(a) The amount
specified in section 2041(b)(2) or 2514(e) of the Internal Revenue Code, as in
effect on December 31, 2012;
(b) The amount
specified in section 2503(b) of the Internal Revenue Code, as in effect on
December 31, 2012; or
(c) Twice the
amount specified in section 2503(b) of the Internal Revenue Code, as in effect
on December 31, 2012, if the donor was married at the time of the transfer to
which the power of withdrawal applies.
(4) The assets of
an irrevocable trust that are attributable to a contribution to an inter vivos
marital deduction trust described in section 2523(e) or (f) of the Internal
Revenue Code, as in effect on December 31, 2012, after the death of the spouse
of the settlor of the inter vivos marital deduction trust shall be deemed to
have been contributed by the settlor’s spouse and not by the settlor.
(5) The assets of
an irrevocable trust for the benefit of a person, including the settlor, are
not subject to claims of creditors of the settlor to the extent that the
property of the trust is subject to a presently exercisable general power of
appointment held by a person other than the settlor.
(6) Subsections
(2) and (3) of this section do not apply to a person other than a settlor who
is a beneficiary of a revocable or irrevocable trust and who is also a trustee
of the trust, if the power to withdraw for the person’s own benefit is limited
by an ascertainable standard. [2005 c.348 §42; 2013 c.529 §9; 2017 c.17 §5;
2021 c.272 §8]
Notes of Decisions
Hendricks Law Firm PC v. Foraker, No. 3:23-cv-01150 (D. Or. Dec. 4, 2024).
· cites it 6× “The commentary to Oregon’s UTC provides that “[i]f the trustee has discretion to distribute the entire income and principal to the settlor, the effect of [ORS § 130.315] is to place the settlor’s creditors in the same position as if the trust had not been created.”
Hendricks Law Firm PC v. Foraker, No. 3:23-cv-01150 (D. Or. Mar. 11, 2024).
· cites it 4× “” ORS § 130.315(1)(a). A creditor 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 one settlor, then a creditor may reach only the portion of the trust that represents the particular debtor…”
Hannah v. Washington Cnty. Assessor, No. TC-MD 150449N (Or. T.C. May 25, 2016).
· cites it 3× “See ORS 130.315(1)(a) (“During the lifetime of the settlor, the property of a revocable trust is subject to claims of the settlor’s creditors”); Johnson v.”
Lance Harding Lupton, No. 21-30547 (Bankr. D. Or. June 11, 2021).
· cites it 2× “5 ORS 130.315(1). 6 Johnson v. Commercial Bank, 588 P.”
Hannah v. Washington Cnty. Assessor & Dept. of Rev., No. TC-MD 150449N (Or. T.C. Nov. 29, 2016).
“Vollmar, The Oregon Uniform Trust Code and Comments, 42 Willamette L Rev 187, 212 (2006) (noting that “the holder of a power of withdrawal has the rights of a settlor of a revocable trust”); see also Restatement (Third) of Trusts, § 56, comment b (2003) (stating that “[t]rust…”
Or. Rev. Stat. § 130.315(1): 1 case
Lance Harding Lupton, No. 21-30547 (Bankr. D. Or. June 11, 2021).
“5 ORS 130.315(1). 6 Johnson v. Commercial Bank, 588 P.”
Or. Rev. Stat. § 130.315(1)(a): 3 cases
Hendricks Law Firm PC v. Foraker, No. 3:23-cv-01150 (D. Or. Dec. 4, 2024).
“The commentary to Oregon’s UTC provides that “[i]f the trustee has discretion to distribute the entire income and principal to the settlor, the effect of [ORS § 130.315] is to place the settlor’s creditors in the same position as if the trust had not been created.”
Hendricks Law Firm PC v. Foraker, No. 3:23-cv-01150 (D. Or. Mar. 11, 2024).
“” ORS § 130.315(1)(a). A creditor 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 one settlor, then a creditor may reach only the portion of the trust that represents the particular debtor…”
Hannah v. Washington Cnty. Assessor, No. TC-MD 150449N (Or. T.C. May 25, 2016).
“See ORS 130.315(1)(a) (“During the lifetime of the settlor, the property of a revocable trust is subject to claims of the settlor’s creditors”); Johnson v.”
Or. Rev. Stat. § 130.315(1)(b): 2 cases
Hendricks Law Firm PC v. Foraker, No. 3:23-cv-01150 (D. Or. Mar. 11, 2024).
“” ORS § 130.315(1)(a). A creditor 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 one settlor, then a creditor may reach only the portion of the trust that represents the particular debtor…”
Hannah v. Washington Cnty. Assessor, No. TC-MD 150449N (Or. T.C. May 25, 2016).
“See ORS 130.315(1)(a) (“During the lifetime of the settlor, the property of a revocable trust is subject to claims of the settlor’s creditors”); Johnson v.”
Or. Rev. Stat. § 130.315(2): 1 case
Hannah v. Washington Cnty. Assessor & Dept. of Rev., No. TC-MD 150449N (Or. T.C. Nov. 29, 2016).
“Vollmar, The Oregon Uniform Trust Code and Comments, 42 Willamette L Rev 187, 212 (2006) (noting that “the holder of a power of withdrawal has the rights of a settlor of a revocable trust”); see also Restatement (Third) of Trusts, § 56, comment b (2003) (stating that “[t]rust…”
Or. Rev. Stat. § 130.315(a): 1 case
Lance Harding Lupton, No. 21-30547 (Bankr. D. Or. June 11, 2021).
“5 ORS 130.315(1). 6 Johnson v. Commercial Bank, 588 P.”
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