Spendthrift Trusts After Carmack and Blech; What Do We Do Now?

By Published On: January 14, 2020Categories: Presentations

Spendthrift trusts provide that a beneficiary’s interest may not be alienated, assigned to creditors, or otherwise anticipated by the beneficiary. But, after Carmack v. Reynolds, spendthrift provisions no longer offer the same viability for those who wish to exercise the ’dead hand of control’ over their presumably improvident donees and beneficiaries to protect them from their own creditors. Further, because the interpretation of California’s spendthrift laws is a subject previously uncertain but clarified by this Court in its Carmack v. Reynolds decision, then the result of the Blech decision is that law is no longer clear, nor uniform—with a disparity between trusts with bankrupt beneficiaries with bankruptcy estates administered by Chapter 7 liquidation trustees versus those without. THE HARSH LESSON TO BE LEARNED is that, after Carmack v. Reynolds and Blech, the customary methods to protect improvident donees and beneficiaries using the traditional spendthrift trust rules can be ineffectual. The ‘Dead Hand Of Control’ is crippled – at least in the State of California. Presentation discusses Carmack v. Reynolds (2017) 2 Cal.5th 844 and Blech v. Blech (2019) 38 Cal.App.5th 941,

Presenter; Author, Spendthrift Trusts After Carmack and Blech; What Do We Do Now?, San Fernando Valley Bar Association (SFVBA), 2020

About the Author: Adam Streltzer

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Adam is a member of the State Bar of California, Los Angeles County Bar Association, Beverly Hills Bar Association, and Commercial Law League of America. He is admitted to practice before all of the courts of the State of California, U.S. Court of Appeals for the Ninth Circuit, U.S. District Court for all federal court districts in California (Central, Northern, Southern, and Eastern), and the U.S. Tax Court. He is also an active member of the Los Angeles County Superior Court’s appointed counsel (formerly Probate Volunteer Panel (PVP)) program and volunteers his time at the Los Angeles County Superior Court.