The Person Who Hit and Injured Me in an Auto Accident Has All His Assets in a Trust. What Can I Do?

There are many different types of wrinkles one may encounter in an effort to obtain compensation for the harm you suffered in an auto accident. On the surface, your case might seem straightforward: prove that the person you sued was, in fact, at fault, prove that the accident injured you, and prove that those injuries caused you to suffer damages. Seems simple, right? But what happens when the person who hit you has all his assets held by an irrevocable trust? Questions like these are a reminder of the importance of retaining experienced Massachusetts injury counsel, so that you are prepared for whatever twists, turns and surprises your case may throw at you.

Recently, such a “twists and turns” case was the Massachusetts lawsuit brought by S.C. The backstory underlying S.C.’s injury accident dated back several years. In 2001, B.M. was injured in an auto accident. He suffered a severe traumatic brain injury. In 2007, an irrevocable “spendthrift” trust was established for the benefit of B.M. The trust held more than $4.1 million in assets, including $3.5 million in stocks and bonds, a house in Plymouth worth $538,000 and $120,000 of other assets.

Fast forward to 2014, and B.M. and S.C. were involved in a head-on collision. Allegedly, B.M. was traveling 76 mph in a 35 zone, crossed the center line to pass and slammed head-on into S.C.

While a case like S.C.’s might otherwise have been fairly straightforward, the existence of B.M.’s trust made this lawsuit more complicated. S.C. wisely made sure to account for the trust when she sued. She asserted that B.M. was negligent and that his negligence had caused the crash and her injuries. She also asked the judge to declare that the assets held by the trust were available to satisfy the damages award she would receive as a result of the outcome of the case.

The appellate court issued a ruling in favor of S.C. The court noted that there are several types of trusts and a trust’s “identity” will affect how the courts treat it. A self-settled trust generally is not available to provide any asset protection. So, if the person who hit and injured you in an auto accident has created, for example, a “living trust” as type of estate planning device, you can generally pursue that trust’s assets just as you would assets in the defendant’s own name to satisfy the damages award you received.

In many situations, assets given by a third party to a spendthrift trust would be protected from creditors, including you as an auto accident judgment creditor. However, if a spendthrift trust has assets in it that previously belonged to the beneficiary (or the beneficiary had a legal claim to those assets), then you can generally go after those. In S.C.’s case, the assets contained in B.M.’s spendthrift trust were things either that B.M. previously owned or that his ex-wife previously owned.

With the ex-wife’s assets, had she funded those assets into the trust as a gift, then they might have been protected from S.C.’s claims. However, B.M.’s ex-wife placed those assets in his trust as part of the resolution of the couple’s divorce case. That meant they weren’t a gift and they, along with the assets B.M. had previously held in his own name, were available to satisfy S.C.’s auto accident judgment.

This all may sound very complicated, but the important thing to take away is that there are many factors that go into succeeding in an auto accident case, beyond simply providing evidence of the defendant’s fault and your harm. Make sure you are prepared by having an experienced personal injury litigator in your corner. Knowledgeable Plymouth County injury lawyer Michael S. Mehrmann has spent many years effectively representing people from across Plymouth County, including Kingston, Plymouth, Marshfield, Hanson, Carver, Pembroke, and Duxbury in their auto accident injury cases. To find out more about how we can help you, call (781) 585-3911 or contact us online.