Daniel A. McGowan is an Ohio and Florida probate lawyer who handles complicated inheritance disputes. He can be reached for a free consultation by clicking here.
A trust is a relationship (not an entity) created by a settlor (i.e. donor or grantor) who transfers legal title to property (the corpus) to a trustee, who holds the corpuse for the benefit of one or more beneficiaries. The beneficiaries’ rights of enjoyment are set forth in the terms of the trust, which are usually contained in a governing document, which may be called a “trust agreement.”
One of the most critical advantages to a trust is its featured character in protecting assets from creditors’ claims against the grantor’s or donor’s probate estate. This is because the assets in a revocable trust are not part of the probate estate and are therefore not subject to claims against the estate. However, a few Ohio courts have ruled that in certain circumstances particular types of creditors may access trust assets following the death o the grantor. For example, in Sowers v. Luginbill, the court held that a tort creditor that filed suit prior to grantor’s death could collect against trust following judgment issued after death.
Any trust can be “spendthrifted,” including language which prohibits creditors of a beneficiary from collecting their claim out of the trust assets. Click here for the applicable provisions of the Ohio Trust Code.