Spendthrift Limitation Found Constitutional

The beneficiary of a spendthrifttrust personally guaranteed a loan of $350,000 to the business of which he wasa principal, assuring the lenders that he was the beneficiary of a trust worthin excess of $6.8 million.  The business defaulted and the trustee refusedto pay on the guarantee because of the spendthrift limitation in thetrust. 

The lenders sued, alleging that theFlorida statutes that recognize the enforceability of spendthrift provisionsviolate the guarantee of equal access to the courts contained in the FloridaConstitution, claiming that the statutes abolished a common right to execute amonetary judgment against any beneficial interest held by the debtor.  Thetrial court granted summary judgment to the trustee and the intermediateappellate court affirmed, holding that because the validity of spendthriftlimitations was recognized long before the adoption of the statutes, they donot abolish a common right but rather recognize it.  Zlatkiss v. AllAmerica Team Concepts, LLC, No. 5D12–3324, 2013 WL 2359108 (Fla. Dist. Ct. App.May 31, 2013).

Special thanks to William LaPiana (Professor of Law, New York LawSchool) for bringing this case to my attention.