Charlotte Edition


By James W. Mallonee

TRUST DISTRIBUTION FROM SPECIAL NEEDS TRUSTSThe old Bacardi and Berlinger cases have once again raised their heads as parents try to insulate their children from having to pay child or alimony payments. As you may recall, the Supreme Court of the State of Florida and the Second District Court of Appeal agreed that attempts to prevent the payment of ordered family maintenance compensation cannot be prevented by and through a trust instrument.

In the latest round of challenges to this rule, the Second District Court of Appeal ruled that even a special needs trust established to provide funds to a disabled person who has an obligation to provide child support cannot be insulated from doing so by a trust.

The facts of the case are a child support order was obtained from the court in May, 2009 against the defendant. As of May, 2017, no payments had been made from the defendant to support his children. At the time of the courts ruling, the amount of arrearage was estimated at $91,780.28. The defendant’s income to the special needs trust is $3,035.59 monthly for the rest of the defendant’s life. The defendant’s monthly expenses (exclusive of the child support) is $2,478.00. The trust was set up due to an accident resulting in lifetime benefits to the defendant.

At first pass the defendant was exonerated by the trial court under the guise that there was no ability for the defendant to pay the back arrearage or his ongoing monthly obligations. The trial court further reasoned that the special needs trust was not under the defendant’s control, and that it contained a spendthrift clause preventing garnishment from the trust. A spendthrift clause is used to prevent creditors from garnishing a person’s estate to pay off a creditor of a beneficiary. In this case, the creditor would have been the individual seeking the child support obligations and the beneficiary of the trust was the person receiving the monthly funds.

The Second District Court of Appeals, reversed the trial court stating that simply having special needs trust does not insulate the beneficiary from his or her obligations when it comes to supporting their children. The court went on to state that a continuing garnishment was appropriate in this case. However, be aware that before you can seek garnishment for failing to pay ones child support and alimony obligations, you must seek all traditional remedies before seeking garnishment from a trust. Only when all traditional remedies have been sought and there is no success can a lawsuit be filed to force a garnishment remedy from a protective trust.

The take away message from this ruling is that Florida Courts will seek to review the public policies of maintaining the protections of a spendthrift clause but when it conflicts with an order for support from the court, the support order will always take precedence. The idea being that it is Florida’s public policy not to have a child be destitute when it can be prevented.

If you believe that you are the victim of a support obligation that is not being fulfilled, seek the attorney of your choice and have that discussion of what remedies are available to you. Given that this is the third case to break through the vail of a protective trust, it should begin to show that individuals who try to employ tactics to insulate themselves from fulfilling their obligations can be pierced.

This article is intended for informational use only and is not for purposes of providing legal advice or association of a lawyer – client relationship.

James W. Mallonee (Jim Mallonee) is a graduate with a B.A. degree from the University of South Florida and a Master of Science degree from Rollins College in Winter Park, Florida. He obtained his Juris Doctorate from the University of the Pacific, McGeorge School of Law in Sacramento, California. Prior to returning to Florida to practice law, Mr. Mallonee was employed by Intel Corporation for 22 years in such locations as New Jersey, Florida and California.

In addition to being a member of the Florida Bar since 2003, Mr. Mallonee serves on the Charlotte Community Foundation Committee for asset allocation and teaches Business Law at State College of Florida. Mr. Mallonee is also on the Board of Directors for the Military Heritage Museum located in Charlotte County, Florida.

His firm practices law in the following areas: Probate, Wills & Trusts, Guardianships, and Litigation in the areas of Real Estate, Guardianships and Estates. The firm has two locations in Venice and Port Charlotte, Florida.

James W. Mallonee, P.A.
946 Tamiami Trail, #206
Port Charlotte, FL 33953
(941) 206-2223
Facsimile (941) 206-2224

871 Venetia Bay Blvd., #225
Venice, FL 34285
(941) 207-2223

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