Case Summary:
The Trustee sought turnover of the Debtor’s interest in a trust, as well as turnover of an annual trust payment to which the Debtor was entitled. The Bankruptcy Court held that the Debtor’s interest in the Trust was not part of the bankruptcy estate because the trust was an enforceable spendthrift trust under Wisconsin law. The Court further held that the Trustee was not entitled to the annual payment, notwithstanding a Wisconsin statute that authorized judgment creditors to apply for principal payments of a spendthrift trust when they have become due or payable. Because the Trustee of the Trust had discretion to withhold the annual payment from the Debtor, it was not “due or payable,” and the Bankruptcy Trustee was not entitled to turnover. The Court granted summary judgment in favor of the Debtor.

Statute/Rule References:
11 U.S.C. § 523(a)(15) -- Nondischargeability - Marital Obligations
11 U.S.C. § 524 -- Discharge Injunction
11 U.S.C. § 541(c)(2)
Wis. Stat. § 701.06 -- Spendthrift Provisions and Rights of Creditors of Beneficiaries

Key Terms:
Discharge 
Divorce Decrees - Post Discharge Enforcement
Due or Payable
Principal Payment
Specificity of Statute
Spendthrift Trust
Turnover of Property