Continuing Writs Of Garnishment Against Discretionary Trusts–How Far Does It Go? [Florida]

by Charles (Chuck) Rubin
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In the recent 2nd DCA case of Berlinger v. Casselberry, the court allowed a continuing writ of garnishment against distributions to be made to a beneficiary of what appears to be a discretionary trust, for unpaid alimony obligations of the beneficiary. This opinion resolves (at least within the 2nd DCA) some statutory questions regarding continuing writs of garnishment, but raises others.

The continuing writ is not a surprise here, since it is specifically contemplated by Fla.Stats. Section 736.0503(3) that provides special limitations on creditor protection and spendthrift trusts for unpaid support and maintenance obligations. Fla.Stats. Section 736.0503(3) is a codification of Bacardi, 463 So.2d 218 (1985), which voided the application of spendthrift provisions of trusts for similar marital obligations. Since 736.0503(3) is expressly subject to 736.0504 by its language, the issue remained whether 736.0504 prohibits garnishment in the circumstances of a discretionary trust. 736.0504 limits creditor rights against discretionary trusts. Thus, an argument exists that 736.0504 overrides 736.0503(3) when a discretionary trust exists. The Berlinger court ruled that a writ of attachment can still apply, notwithstanding the existence of a discretionary trust under 736.0504 and the reference to it in 736.0503(3).

The Berlinger decision relies in part on Bacardi. Since Bacardi predated the establishment of Florida’s trust code in Chapter 736, and indeed was codified into 736.0503(3), its continued application perhaps can be questioned. By relying on Bacardi in part, the 2nd DCA indicates it still applies separate and apart from Chapter 736.

The interesting question here is whether Berlinger can be read to say that a continuing writ of garnishment can be obtained by other creditors NOT described in 736.0503(3) when a discretionary trust is involved. The opinion does not rule this out, and perhaps can be read to broadly say that continuing writs of garnishment are not prohibited in any circumstances against discretionary trusts by 736.0504. Or does the special language of 736.0503(3) and the public policy of Bacardi justify a continuing writ of garnishment only in the circumstances described in 736.0503(3)? Here is the key language of the opinion:

"According to section 736.0504(2), a former spouse may not compel a distribution that is subject to the trustee's discretion or attach or otherwise reach the interest, if any, which the beneficiary may have. The section does not expressly prohibit a former spouse from obtaining a writ of garnishment against discretionary disbursements made by a trustee exercising its discretion. As a result, it makes no difference that the instant trusts are discretionary. Casselberry is not seeking an order compelling a distribution that is subject to the trustee's discretion or attaching the beneficiary's interest."

BRUCE D. BERLINGER, Appellant, v. ROBERTA SUE CASSELBERRY, Appellee. Case No. 2D12-6470. District Court of Appeal of Florida, Second District. Opinion filed November 27, 2013.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Charles (Chuck) Rubin, Gutter Chaves Josepher Rubin Forman Fleisher P.A. | Attorney Advertising

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