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Spendthrift Trusts

Vexatious litigant statutes are intended to prevent harassment.  However, the obvious goal of my probate court petition for division of trust was to simply GET AWAY from City National - the very opposite of harassment.

I had to resort to the probate court to try to free myself from City National because of a clause in the trust document called a "spendthrift" clause. . .  

"VIII.

RESTRICTION ON DISPOSITION OF BENEFICIAL INTERESTS

The interests of beneficiaries in principal or income shall not be subject to claims of their creditors or others nor to legal process, and may not be voluntarily or involuntarily alienated or encumbered."

This creates what is known as a "spendthrift" trust.   Because the trust is a "spendthrift trust" I could not - and still cannot - sell or otherwise alienate my interest in it.  The hand of the dead controls this irreversibly.  

When a partnership goes bad you can usually sell your share (or buy out your partner's share).  If your neighbors become hostile you can move away.  When a marriage goes bad there is divorce (we have, at least since the 1970's, come to see access to divorce as a matter of individual right).   But the spendthrift trust beneficiary has no way to free himself from this relationship created by the hand of the dead.  




How does one free oneself from a hostile trustee and/or hostile co-beneficiaries?   California law permits filing a petition for division of trust when there is "disagreement among the trust beneficiaries".  That's what I did.

The nature of the spendthrift trust: see article here.

Nothing is more antithetical to the Jewish Law of Inheritance than the spendthrift trust.  The sole purpose of the spendthrift trust is to protect the right of the dead to control their money after death.  

"It is always to be remembered that consideration for the beneficiary does not even in the remotest way enter into the policy of the law; it has regard solely to the rights of the donor.  Spendthrift trusts can have no other justification than is to be found in considerations affecting the donor alone." (In re Morgan (1909) 223 Pa. 228, 230).   See also Estes v. Estes (Tex. Civ. App. 1923) 255 S. W. 649, 650-655.