State Street Bank and Trust Co. v. Reiser
Appeals Court of Massachusetts
389 N.E.2d 768 (1979)
Dunnebier conveyed stock in five closely held corporations to a revocable inter vivos trust while retaining the power to amend or revoke it during his lifetime, and separately obtained a $75,000 unsecured working-capital loan from State Street Bank (plaintiff), listing the trust corporations' income and assets on his loan application; after Dunnebier died in an accident four months later with insufficient estate assets to repay the loan, State Street sued to recover from the trust's assets. The probate court found Dunnebier hadn't intended to defraud State Street, and the case was appealed.
Whether, where a settlor of a trust retains the power to amend and revoke the trust or power to control the principal and income during his lifetime, his creditors may reach the assets of the trust after his death to the extent that the assets of his estate are insufficient to pay his debts.