How to Make a Claim Against a Living Trust
A common misconception is that a living trust will protect you from your creditors. Not true. All the property in a living trust is subject to the lawful debts of the trustor--the person who made the trust. If you have a claim against someone who holds all his property in a living trust, pursue your claim in the same manner you would if the trust did not exist. If you must sue to enforce your claim, there are few simple steps you can take to address the issue of a trust.
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Instructions
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Contact the person you have a claim against, by phone or in person, and ask to discuss the claim and the terms on which you would like to resolve it. If you can come to terms, schedule a time to meet and conclude the matter by exchange payment and any release documents. If the other party is paying with funds from a checking account, it does not matter if the account is in her name personally or in her name as trustee of the living trust, such "Jane Smith, trustee of the Smith Family Trust." As long as the check clears, the name on the account does not matter. The same goes for any release document. You can release the person individually, as trustee or both.
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File a lawsuit--preferably in small claims court, if you qualify--to enforce your claim if you're unable to resolve the claim voluntarily. When you fill out court forms for filing, include the other party in both his individual and trustee capacities. For example, list the defendant as "John Smith, individually and as trustee of the Smith Family Trust." This will ensure that the judgment names the trust as a responsible party, as well as the individual.
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Use the court collection procedures to enforce your judgment, if the defendant fails to pay it voluntarily. These procedures involve obtaining a writ of execution from the court clerk and taking it to the sheriff, who will execute the writ according to your instructions, such as levying the defendant's bank account or garnishment of his wages.
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Tips & Warnings
In some cases, you may not be aware of the defendant's property being held in trust until after you obtain your judgment. This should not be a barrier to enforcing your judgment through collection procedures. However, if the sheriff refuses to act on the writ of execution because it does not include the name of the trust, you can ask the judge in your case to amend the judgment to include the trust name.
