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Justice Before Generosity: Creditors\u27 Claim to Assets of a Revocable Trust After the Death of the Settlor

By Lauren Ashley Gribble

Abstract

The Ohio legislature recently passed the Ohio Trust Code, which primarily codified existing trust law. In keeping with the operation of revocable trusts and the principle that settlors should not be able to use such trusts to avoid creditors, it provides that creditors may claim the assets of a revocable trust during the lifetime of the settlor. It is, however, silent as to creditors’ ability to access trust funds after the settlor’s death. Two Ohio appellate courts have discussed the statute, only to arrive at different conclusions regarding its operation and significance in light of case precedent. This Article will argue that the Ohio legislature should amend the statute to permit creditors access to the assets of a revocable trust to satisfy the settlor’s debts upon his death under certain limited circumstances. Part II will discuss pertinent background, including the nature and use of the revocable trust, creditors’ access to trust funds in the past, and the development of Ohio’s statutory law on the subject. Part III will set forth the conflict between the Ohio appellate courts in more detail, framing the relevant issues. Part IV will consider the arguments in favor of permitting creditors access to revocable trust funds after the settlor’s death, while also proposing a method for so doing by showing the following: first, it is in keeping with the principles of Ohio law and public policy; second, it is in keeping with persuasive authority; third, it is a question of statutory amendment for the legislature; fourth, potential pitfalls can be avoided with careful drafting

Topics: revocable trusts, creditor, Uniform Trust Code, Ohio Trust Code, Estates and Trusts
Publisher: IdeaExchange@UAkron
Year: 2015
OAI identifier: oai:ideaexchange.uakron.edu:akronlawreview-1629

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