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COLLECTING AGAINST SPENDTHRIFTS IN BANKRUPTCY, JUDGMENT COLLECTION

Tim Kowal April 24, 2020

In our February newsletter, we noted the California Supreme Court was reviewing whether the ambiguous spendthrift protections of Probate Code sections 15300-15309 meant to impose an absolute cap of 25% against creditors. The Court has answered: "no."

In its recent decision, styled Carmack v. Reynolds, the Court "hold[s] that the Probate Code does not impose such an absolute limit on a general creditor's access to the trust." Instead, "a general creditor may reach a sum up to the full amount of any distributions that are currently due and payable . . . . and separately may reach a sum up to 25 percent of any payments that are anticipated to be made to the beneficiary" in the future. The Court provides a helpful hypothetical near the end of its opinion to illustrate how its somewhat complicated holding might apply.

It's an interesting opinion that concludes the legislature probably made an oversight in drafting the statutes, which gave rise to the confusion.

Tim Kowal is an appellate specialist certified by the California State Bar Board of Legal Specialization. Tim helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at CALpodcast.com, and publishes summaries of cases and appellate tips for trial attorneys. Contact Tim at [email protected] or (949) 676-9989.

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"Upon putting laws into writing, they became even harder to change than before, and a hundred legal fictions rose to reconcile them with reality."

— Will Durant

"Good people do not need laws to tell them to act responsibly, while bad people will find a way around the laws."

— Plato (427-347 B.C.)

"God made the angels to show Him splendor, … Man He made to serve Him wittily, in the tangle of his mind."

— Sir Thomas More in Robert Bolt's A Man for All Seasons

"It may be that the court is thought to be excessively legalistic. I should be sorry to think that it is anything else."

— Hon. Sir Owen Dixon, Chief Justice of Australia

"Moot points have to be settled somehow, once they get thrust upon us. If an assertion cannot be proved, then it must be settled some other way, and nearly all of these ways are unfair to somebody."

—T.H. White, The Once and Future King

"So far as the beginnings of law had theories, the first theory of liability was in terms of a duty to buy off the vengeance of him to whom an injury had been done whether by oneself or by something in one's power. The idea is put strikingly in the Anglo-Saxon legal proverb, 'Buy spear from side or bear it,' that is, buy off the feud or fight it out."

— Roscoe Pound, An Introduction to the Philosophy of Law

“It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood; if they be repealed or revised before they are promulgated, or undergo such incessant changes that no man, who knows what the law is today, can guess what it will be tomorrow. Law is defined to be a rule of action; but how can that be a rule, which is little known, and less fixed?”

— James Madison, Federalist 62

"Counsel on the firing line in an actual trial must be prepared for surprises, including requests for amendments of pleading. They cannot ask that a judgment afterwards obtained be set aside merely because their equilibrium was slightly disturbed by an unexpected motion."

— Posz v. Burchell (1962) 209 Cal.App.2d 324, 334

"At common law, barratry was 'the offense of frequently exciting and stirring up suits and quarrels' (4 Blackstone, Commentaries 134) and was punished as a misdemeanor."

— Rubin v. Green (1993) 4 Cal.4th 1187

COLLECTING AGAINST SPENDTHRIFTS IN BANKRUPTCY, JUDGMENT COLLECTION

"Upon putting laws into writing, they became even harder to change than before, and a hundred legal fictions rose to reconcile them with reality."

— Will Durant

"Good people do not need laws to tell them to act responsibly, while bad people will find a way around the laws."

— Plato (427-347 B.C.)

"God made the angels to show Him splendor, … Man He made to serve Him wittily, in the tangle of his mind."

— Sir Thomas More in Robert Bolt's A Man for All Seasons

"It may be that the court is thought to be excessively legalistic. I should be sorry to think that it is anything else."

— Hon. Sir Owen Dixon, Chief Justice of Australia

"Moot points have to be settled somehow, once they get thrust upon us. If an assertion cannot be proved, then it must be settled some other way, and nearly all of these ways are unfair to somebody."

—T.H. White, The Once and Future King

"At common law, barratry was 'the offense of frequently exciting and stirring up suits and quarrels' (4 Blackstone, Commentaries 134) and was punished as a misdemeanor."

— Rubin v. Green (1993) 4 Cal.4th 1187

Show neither partiality to the weak nor deference to the mighty, but judge your fellow men justly.

— Leviticus

"A judge is a law student who grades his own papers."

— H.L. Mencken

COLLECTING AGAINST SPENDTHRIFTS IN BANKRUPTCY, JUDGMENT COLLECTION

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"Upon putting laws into writing, they became even harder to change than before, and a hundred legal fictions rose to reconcile them with reality." — Will Durant

"Good people do not need laws to tell them to act responsibly, while bad people will find a way around the laws." — Plato (427-347 B.C.)

"God made the angels to show Him splendor, … Man He made to serve Him wittily, in the tangle of his mind." — Sir Thomas More in Robert Bolt's A Man for All Seasons

"It may be that the court is thought to be excessively legalistic. I should be sorry to think that it is anything else." — Hon. Sir Owen Dixon, Chief Justice of Australia

"Moot points have to be settled somehow, once they get thrust upon us. If an assertion cannot be proved, then it must be settled some other way, and nearly all of these ways are unfair to somebody." —T.H. White, The Once and Future King

"At common law, barratry was 'the offense of frequently exciting and stirring up suits and quarrels' (4 Blackstone, Commentaries 134) and was punished as a misdemeanor." — Rubin v. Green (1993) 4 Cal.4th 1187

Show neither partiality to the weak nor deference to the mighty, but judge your fellow men justly. — Leviticus

"A judge is a law student who grades his own papers." — H.L. Mencken

"Upon putting laws into writing, they became even harder to change than before, and a hundred legal fictions rose to reconcile them with reality."

— Will Durant

"Good people do not need laws to tell them to act responsibly, while bad people will find a way around the laws."

— Plato (427-347 B.C.)

"God made the angels to show Him splendor, … Man He made to serve Him wittily, in the tangle of his mind."

— Sir Thomas More in Robert Bolt's A Man for All Seasons

"It may be that the court is thought to be excessively legalistic. I should be sorry to think that it is anything else."

— Hon. Sir Owen Dixon, Chief Justice of Australia

"Moot points have to be settled somehow, once they get thrust upon us. If an assertion cannot be proved, then it must be settled some other way, and nearly all of these ways are unfair to somebody."

—T.H. White, The Once and Future King

"At common law, barratry was 'the offense of frequently exciting and stirring up suits and quarrels' (4 Blackstone, Commentaries 134) and was punished as a misdemeanor."

— Rubin v. Green (1993) 4 Cal.4th 1187

Show neither partiality to the weak nor deference to the mighty, but judge your fellow men justly.

— Leviticus

"A judge is a law student who grades his own papers."

— H.L. Mencken