456.5-505. Creditor's claim against settlor. - Missouri Statutes

Creditor's claim against settlor.

456.5-505. 1. Whether or not the terms of a trust contain aspendthrift provision, during the lifetime of the settlor, the property ofa revocable trust is subject to claims of the settlor's creditors.

2. With respect to an irrevocable trust without a spendthriftprovision, a creditor or assignee of the settlor may reach the maximumamount that can be distributed to or for the settlor's benefit. If a trusthas more than one settlor, the amount the creditor or assignee of aparticular settlor may reach may not exceed the settlor's interest in theportion of the trust attributable to that settlor's contribution.

3. With respect to an irrevocable trust with a spendthrift provision,a spendthrift provision will prevent the settlor's creditors fromsatisfying claims from the trust assets except:

(1) Where the conveyance of assets to the trust was fraudulent as tocreditors pursuant to the provisions of chapter 428, RSMo; or

(2) To the extent of the settlor's beneficial interest in the trustassets, if at the time the trust became irrevocable:

(a) The settlor was the sole beneficiary of either the income orprincipal of the trust or retained the power to amend the trust; or

(b) The settlor was one of a class of beneficiaries and retained aright to receive a specific portion of the income or principal of the trustthat was determinable solely from the provisions of the trust instrument.

4. Any trustee who has a duty or power to pay the debts of a deceasedsettlor may publish a notice in a newspaper published in the countydesignated in subdivision (3) of this subsection once a week for fourconsecutive weeks in substantially the following form:

To all persons interested in the estate of ................,decedent. The undersigned ................ is acting as Trustee under atrust the terms of which provide that the debts of the decedent may be paidby the Trustee(s) upon receipt of proper proof thereof. The address of theTrustee is .................All creditors of the decedent are noticed to present their claims to theundersigned within six (6) months from the date of the first publication ofthis notice or be forever barred.................Trustee

(1) If such publication is duly made by the trustee, any debts notpresented to the trustee within six months from the date of the firstpublication of the preceding notice shall be forever barred as against thetrustee and the trust property.

(2) A trustee shall not be liable to account to the decedent'spersonal representative under the provisions of section 461.300, RSMo, byreason of any debt barred under the provisions of this subsection.

(3) Such publication shall be in a newspaper published in:

(a) The county in which the domicile of the settlor at the time ofhis or her death is situated;

(b) If the settlor had no domicile in this state at the time of hisor her death, any county wherein trust assets are located; except that,when the major part of the trust assets in this state consist of realestate, the notice shall be published in the county in which the realestate or the major part thereof is located; or

(c) If the settlor had no domicile in this state at the time of hisor her death and no trust assets are located therein, the county whereinthe principal place of administration of the trust is located.

(4) For purposes of this subsection, the term "domicile" means theplace in which the settlor voluntarily fixed his or her abode, not for amere special or temporary purpose, but with a present intention ofremaining there permanently or for an indefinite term.

5. For purposes of this section:

(1) During the period the power may be exercised, the holder of apower of withdrawal is treated in the same manner as the settlor of arevocable trust to the extent of the property subject to the power; and

(2) Upon the lapse, release, or waiver of the power, the holder istreated as the settlor of the trust only to the extent the value of theproperty affected by the lapse, release, or waiver exceeds the greater ofthe amount specified in Sections 2041(b)(2), 2514(e) or 2503(b) of theInternal Revenue Code.

6. This section shall not apply to a spendthrift trust described,defined, or established in section 456.014.

(L. 2004 H.B. 1511, A.L. 2009 H.B. 239)