Does a trust have an obligation to distributed funds now available if a creditor has filed a “petition to enforce a judgement”?

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Does a trust have an obligation to distributed funds now available if a creditor has filed a “petition to enforce a judgement”?

A creditor filed a “petition to enforce a old judgement” and served the trust that I am a beneficiary of. I just found out that the funds will be available to me this week. But the court date for the creditor isn’t until next month. Does the trust have a obligation to pay me as a beneficiary since the petition has not yet been granted? Or must they hold the funds because they were already served?

Asked on September 18, 2011 under Estate Planning, California

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

If you are a beneficiary under a trust where there will be a distribution to you under it before the hearing date that the judgment creditor has set against you to obtain the funds that you are slated to receive in an attempt to obtain partial or full satisfaction of the judgment against you, the trustee of the trust is under no obligation to delay paying you what you are entitled to under the trust until the court makes a decision on the petition.

The only way the trustee under the trust would be forced to delay paying you the monies you are to receive under the trust is if the judgment creditor went in on an ex parte basis seeking an order from the court enjoining the trustee from making the distribution to you prior to the actual hearing date and the ex parte application was granted.


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