Chang

Security Pacific Bank Washington v. Chang

Good Law
80 F.3d 1412·96 Daily Journal DAR 4319·1996 WL 167591·1996 U.S. App. LEXIS 7460·96 Cal. Daily Op. Serv. 2535
United States Court of Appeals for the Ninth CircuitApril 11, 1996No. 93-17384California3,479 words

Opinion

Lead Opinion

Scannlain, J.

We must decide whether, under Hawaii law, a creditor is barred from reaching property held in a revocable living trust with a spendthrift clause when the property had formerly been held in tenancy by the entirety between the debtor and his wife.

I

Appellant Security Pacific Bank Washington (the “Bank”) appeals the district court’s grant of summary judgment in favor of Ap-pellees Jing Long Chang (aka Alan Chang) and Chu Whea Wu Chang (aka Julia Chang) in the Bank’s diversity action seeking to satisfy a judgment against Alan Chang by reaching real property held in a spendthrift trust. Prior to conveying the real property to the Alan Chang Trust, the Changs held the property in tenancy by the entirety.

On March 27, 1990, Alan Chang and his wife, Julia Chang, established two revocable living trusts: the Alan Chang Trust with Alan Chang as trustee and beneficiary, and the Julia Chang Trust with Julia Chang as trustee and beneficiary. Each trust contains the following spendthrift provision: “Alienation of Trust. No part of the principal or income of this trust shall be subject to anticipation, alienation, disposition, or assignment by any beneficiary or be subject to the claims of…

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