In Re Laurence A. NEUTON; Esther Neuton, Debtors. Laurence A. NEUTON, Appellant, v. Curtis B. DANNING, Trustee, Appellee

OVERVIEW

Debtor Laurence Neuton appeals a decision of the Bankruptcy Appellate Panel (BAP). The panel affirmed the bankruptcy court’s determination that 25% of the debt- or’s interest in a spendthrift trust, and all proceeds therefrom, are property of the estate. Neuton argues that his interest in the trust, because it vested after the bankruptcy petition was filed, was a contingent interest that does not belong to the estate. He also maintains that the spendthrift status of the trust bars the estate from reaching it. Finally, he faults the bankruptcy court and the BAP for failing to consider whether he needed all his income for his support. While largely affirming the BAP’s decision, we further ask the bankruptcy court on remand to consider the issue of the amount Neuton will need, both at present and in the future, for his support.

FACTUAL AND PROCEDURAL BACKGROUND

The relevant facts are essentially uncontested. On November 12, 1987, Laurence Neuton and Esther Neuton (“the debtors”) filed a joint voluntary Chapter 7 bankruptcy petition. Among the assets listed on their schedule B-2 was an interest in the Fannie Borun Trust (“trust”) of unknown value. No party disputes the…