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Spendthrift clause does not prevent transfer of the remainder

TexasThe decedent’s will created a trust giving income and up to all of the corpus in the trustee’s discretion to the widow, remainder to the decedent’s two children, A and B.  No provision was made for death of a child before the widow, and in fact one child predeceased the widow.

The trust contained language preventing any beneficiary from alienating his or her interest and making it immune from creditors’ claims.

The court held that one-half of the trust property should be distributed through the deceased child’s will to his widow, holding that in that absence of any condition precedent, the remainder was vested, that the possibility that the entire corpus might have been consumed by distributions to the widow did not change that result, and that the spendthrift provision did not prevent transmission of the remainder through the deceased beneficiary’s estate.

In re Townley Bypass Unified Credit Trust, 252 S.W.3d 715 (Tex. App. 2008).

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