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Texas Tech Univ. School of Law

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Saturday, October 12, 2013

Ohio Allows Creditors Access to Revocable Trusts of Decedents

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In Watterson v. Burnard, the Sixth District Court of Appeals of Ohio decided to allow a revocable trust created by a decedent prior to death to be subject to claims of the decedent’s creditors after the death of the decedent settlor.

Watterson filed a personal injury suit against Burnard following an auto accident, but Burnard died while the suit was pending.  Prior to her death, Burnard created and funded a revocable trust, which Watterson requested be made available to satisfy any judgment he might obtain.  The trial court found the trust’s assets ceased to be available to a creditor unless the credtor’s claim was reduced to a judgment before the settlor’s death. 

The appellate court disagreed, concluding there was no reason to terminate the creditor’s access to the trust’s assets simply due to the settlor’s death.  The court found the Ohio legislature intended for even subsequent creditors to have access to a debtor’s assets in a revocable trust. 

See Kathy Sherby & Stephanie Moll, Creditor’s Rights to Recover from Decedent’s (No Longer…) Revocable Trust, Bryan Cave Private Client Blog, Oct. 7, 2013.

http://lawprofessors.typepad.com/trusts_estates_prof/2013/10/ohio-allows-creditors-access-to-revocable-trusts-of-decedents.html

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