What Is an Irrevocable Trust & Garnishment?
Irrevocable trusts have specific limitations regarding when the terms of the trust may be altered. The proceeds of an irrevocable trust may be garnished by order of the court under specific circumstances and may be limited based upon the language of the trust agreement. Seek the help of attorney in your state regardig trusts and garnishments of your trusts.
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Definition
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According to "Black's Law Dictionary," an irrevocable trust is a trust that cannot be revoked or modified by the creator once the trust is created. The garnishment of irrevocable trust proceeds may occur when a court orders payment of the beneficiary's debt to creditors or former spouses.
Requirements to be Considered Irrevocable
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Most states automatically recognize a trust as irrevocable unless it states otherwise. In other states, the trust agreements must clearly state that it is irrevocable or have specific provisions that would make it irrevocable in the eyes of the law. Check your state law before finalizing a trust.
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Garnishment of Trust Proceeds
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When spendthrift provisions are added to trust agreements, the trust becomes irrevocable. Spendthrift provisions are paragraphs in the trust agreement that state that creditors may not reach the trust property. The spendthrift provision also prevents creditors from reaching the trust proceeds through garnishment. Many states, however, will allow the garnishment of trust proceeds for child support and alimony even if a spendthrift provision is present.
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References
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