Illinois  |  Wills and Trusts

Legal Question

Asked on: 6/21/13, 9:19 am

Can restrictions in a trust prevent asset seizure/confiscation of a beneficiary by creditors? Does it make a difference if the creditor is the government?

Simple trust: three equal beneficiaries, all married.

One beneficiary’s spouse had personal assets commingled with business assets, and the business was fined by the government for unpaid taxes. A lien was put on their jointly-owned house, which they eventually lost in a foreclosure.

When the assets in the trust are dispersed, can the payout be temporarily withheld from the beneficiary with the fined spouse? Can the government seize his portion of the inheritance?

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