The issue presented is whether a debtor’s remainder interests in the corpus of two spendthrift trusts are property of his bankruptcy estate. The bankruptcy court ruled that they were; on appeal, the district court ruled that they were not. The Appeals Court believes the district court is correct that the debtor’s remainder interests are not part of his bankruptcy estate.
The bankruptcy estate includes “all legal or equitable interests of the debtor in property as of the commencement of the case,” with some exceptions. One such exception provides that “[a] restriction on the transfer of a beneficial interest of the debtor in a trust that is enforceable under applicable non-bankruptcy law is enforceable in a case under this title.” The bankruptcy court and the district court agreed that this provision excludes from the property of the bankruptcy estate interests in trust that are protected under a spendthrift clause that is enforceable under applicable state law.
Affirmed.
Unpublished opinions are not binding precedent.
