During the lifetime of a settlor (i.e., trust-maker), the property of a revocable trust is subject to claims of the settlor’s creditors. Section 456.5-505.1, RSMo. Upon the settlor’s death, most revocable trusts are structured to where the trustee may pay the settlor’s last debts and expenses. Because these expenses can arise down the road and…
Legal Articles
Real Party in Interest, Assignment
A “real party in interest” is one who possesses the legal right to bring a suit and not necessarily the person who benefits from the legal recovery. Asumus v. Capital Region Family Practice, 115 S.W.3d 427, 436 (Mo. Ct. App. 2003). The “real party in interest rules”generally exist to include include all beneficially interested parties….
Trustees, Personal Liability
Asset protection is a big reason individuals will sometimes create a trust. A lot of the focus in such situations is on making sure a beneficiary’s interest in a trust estate is outside the purview of creditors. To that end, trusts often utilize spendthrift provisions. A spendthrift provision is language in a trust that prevents…
Partnership Property, Creditors
One of the benefits of a limited partnership is to protect against liabilities. A partner’s individual creditors cannot attach or encumber partnership property to satisfy a partner’s individual debt. Section 358.250, RSMo; Anchor Centre Partners, Ltd. v. Mercantile Bank, N.A., 803 S.W.23, 31 (Mo. 1991). This flows from a partner’s inability to assign his or…
Individual Retirement Account (IRA) Creditor Protections, Garnishments/Execution
You go to court and win a monetary judgment, sometimes after several years and expending a significant amount of time and money. This does not mean, though, that you automatically get the money. If you have a judgment, it is your responsibility to collect it through judgment executions and garnishments. What most do not appreciate…
Exceptions to Trust Spendthrift Clauses
A spendthrift provision in a trust generally prohibts a creditor from trying to collect a debt of a beneficiary by seizing the beneficiary’s interest in a trust to satisfy the debt. These types of clauses are commonly included in trusts because the trust-creator (i.e., “settlor”) wants the trust money and assets to be used for…
Spendthrift Clause Enforceability in Trusts
A spendthrift clause is a provision in a trust which prohbits a beneficiary’s interest from being assigned and prevents a creditor from attaching that interest. Bruce G Robert QTIP Marital Trust v. Grasson, 332 S.W.3d 248, 256 (Mo. Ct. App. 2010). What this means is that the beneficiary cannot voluntarily assign out the interest in the…
Attachment, Missouri Judgment Collection
Under Missouri procedural rules, an “attachment” is a prejudgment remedy by which property can be taken into custody to satisfy an anticipated judgment. It does not create a right to a judgment or debt. Instead, it provides a means of enforcing a judgment. In essence, an attachment is designed to allow a plaintiff take control of…
Fraudulent Transfers
You either have a judgment or clear evidence that someone owes you money as a creditor. What’s to prevent the debtor from transferring around assets and hiding funds from your debt/judgment? Under the Missouri Uniform Fraudulent Transfer Act (“MUFTA”), transfers of assets may in certain circumstances be set aside to satisfy a judgment. “To set…
Post-Judgment Interest
Prejudgment interest is more complicated than post-judgment interest. Under the post-judgment interest statute, the statutory interest rate — 9% — begins tolling when there is money due under a judgment or order. Specifically, section 408.040, RSMo, states that: “interest shall be allowed on all money due upon any judgment or order of any court from…