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In Maryland, it is well settled that spendthrift trusts may be created. The income from and corpus of such trusts are not subject to attachment or garnishment in the hands of the trustee.
The beneficiary's mother created a spendthrift trust for his benefit. After the beneficiary was convicted of the felony murder of the victim, in the course of an armed robbery, the survivors obtained a civil judgment against him. The settlement protected payments to the beneficiary from garnishment, so the survivors sought to recover from the principal. They argued that since Maryland law recognized several public policy exceptions to the protection of spendthrift trusts against creditors' claims, such as alimony, child support, and back taxes, it would be appropriate to recognize another exception, in light of the strong public policy against allowing a criminal to profit from his crimes. Summary judgment was granted in favor of the beneficiary and the trustee. A writ of certiorari was granted.
May a tort judgment be satisfied by invading the principal of a spendthrift trust held for the benefit of the tortfeasor?
While the high court acknowledged the public policy exceptions to the protection of spendthrift trusts against creditors' claims, it noted that the trust provisions were not related to the crime in any way. Furthermore, family and tax obligations related to duties, not to mere debts. Horrendous as the origins of the survivors' claim had been for them, nonetheless, they were still ordinary judgment creditors. A change that drastically changed a settlor's right to dispose of property as she wished was a matter for the legislature, not the courts.