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Section 52-321 – Liability of income of trust fund to creditors. Expenses of trustee

May 11, 2021 | Civil Procedure, Connecticut

Except as provided in sections 52-321a and 52-352b:

(a) If property has been given to trustees to pay over the income to any person, without provision for accumulation or express authorization to the trustees to withhold the income, and the income has not been expressly given for the support of the beneficiary or his family, the income shall be liable in equity to the claims of all creditors of the beneficiary.
(b) Any creditor of the beneficiary who has secured a judgment against the beneficiary may bring an action against him and serve the trustees with garnishee process, and the court to which the action is returnable may direct the trustees to pay over the net income derived from the trust estate to the judgment creditor, as the income may accrue, until the creditor’s debt is satisfied.
(c) The court having jurisdiction over the fund may make such an order for payment pursuant to subsection (b) when the beneficiary is a nonresident of this state, as well as when the beneficiary is a resident, but in the case of a nonresident beneficiary notice shall be given to the nonresident of the action against him as provided in section 52-87. The nonresidence of the beneficiary shall not deprive the court of authority to make such an order.
(d) If any such trust has been expressly provided to be for the support of the beneficiary or his family, a court of equity having jurisdiction may make such order regarding the surplus, if any, not required for the support of the beneficiary or his family, as justice and equity may require.
(e) The defendant trustee in any such action shall be entitled to charge in the administration account of the trust such expenses and disbursements as the court to which the action is brought determines to be reasonable and proper.

Conn. Gen. Stat. ยง 52-321

(1949 Rev., S. 8034; 1953, S. 3195d; P.A. 82-160, S. 223; P.A. 91-239, S. 1, 4.)

Cited. 72 Conn. 45; 96 C. 70; 147 Conn. 561. Does not apply to trust where trustees are to hold and expend income. 80 C. 237. Statute alone does not give jurisdiction of nonresident. 90 C. 299; 127 C. 112. Only method to create spendthrift trust; requisites. 95 C. 216; 107 C. 13; 108 Conn. 425. If any one of conditions is present, income is exempt from attachment; trust held a spendthrift trust. 107 Conn. 13; 108 Conn. 425. Spendthrift trust; income not assignable or attachable. 119 C. 141; Id., 508. No title to income passes to beneficiary unless and until appropriated to him by trustee. Id., 512. Trustee in determining whether to make expenditures under discretionary trust for support is entitled to take into consideration other means of support available to beneficiary. 119 C. 138; 133 C. 39. Statute does not protect trust created by settlor from his own property for his own benefit. 129 C. 222. Trustee’s discretion subject to control of court only to extent abused. 133 C. 37. Fact that trust was not explicitly a spendthrift trust held not to mean that protection of beneficiary was not a purpose of the trust. 145 C. 634. Agreement of children of settlor of an irrevocable inter vivos trust, which was to be set up at settlor’s death as spendthrift trusts for their benefit, to assign incomes therefrom to pay father’s debts after his decease was unenforceable by executrix of father’s estate; income of spendthrift trusts cannot be assigned by beneficiaries; spendthrift trusts to benefit children of settlor after his decease not changed by letter of children to third party lender who never relied thereon in making loans to settlor; spendthrift character of trust prevailed once irrevocable inter vivos trust was set up. 157 Conn. 315. Although section clearly permits court to order payment by trustee of creditor’s claim only after claim is reduced to judgment, it does not bar equitable relief short of actual payment during pendency of action. 173 C. 276. Cited. 209 Conn. 15. Cited. 32 CA 152. Statute contemplates existing trust. 7 CS 308. Statute does not contemplate trusts where settlor is beneficiary or where settlor is one beneficiary and payments to him are interwoven with payments to the others; here the entire provision for payment was held invalid. 10 CS 147. Cited. 37 CS 566. Burden is on plaintiff to show spendthrift trust was intended. 4 Conn. Cir. Ct. 402.