## Facts

- Bank of Dallas obtained a judgment for $30,471.88 against Patricia Murray Fewell and George H. Fewell.
- To collect, Bank of Dallas sought a writ of garnishment against Republic National Bank of Dallas, acting as trustee of the Patricia Murray Fewell Trust.
- Patricia, as settlor, created an irrevocable trust for the benefit of herself and her children and included spendthrift restrictions against creditors.
- The trust required the trustee to pay all net income to Patricia during her lifetime.
- The trustee had discretion to invade principal for support of Patricia and her descendants.
- Patricia held a testamentary power of appointment over remaining principal and undistributed income at her death; absent exercise, the remainder passed to specified beneficiaries.
- Republic National Bank denied that either trust income or principal was subject to garnishment.
- The trial court ruled that income on hand and later received income were garnishable, but the trust corpus was not.

## Issues

1. Whether trust income from an irrevocable spendthrift trust, payable to the settlor-beneficiary, is subject to garnishment by the settlor’s judgment creditors.
2. Whether the trust corpus is subject to garnishment where the trustee’s power to distribute principal is discretionary and the settlor holds only a testamentary power of appointment.

## Decision

- The appellate court held that trust income on hand when the writ was served, and income received before the trustee answered, was subject to garnishment.
- The court held that the trust corpus was not subject to garnishment.
- The court rejected the argument that a testamentary power of appointment created a present, garnishable property interest in the trust principal.
- The judgment was affirmed in part and reversed in part to conform to these holdings.

## Legal Principles

- Garnishment reaches only property, debts, or credits that the judgment debtor could presently enforce against the garnishee.
- A spendthrift provision generally protects trust corpus from a beneficiary’s creditors, particularly where principal distributions are discretionary and the beneficiary cannot compel payment.
- Trust income that the trustee is required to distribute becomes a debt owed to the beneficiary once accrued and payable, and may be reached by garnishment within the garnishment period (service through answer).
- A purely testamentary power of appointment does not give creditors a present right to compel distribution or otherwise garnish the underlying trust corpus.

## Conclusion

The court permitted garnishment of accrued, mandatory trust income owed to the settlor-beneficiary but barred garnishment of the trust corpus because principal distributions were discretionary and the settlor’s testamentary power of appointment did not create a present property interest reachable by creditors.


Bank of Dall. v. Republic Nat'l Bank of Dall., 540 S.W.2d 499 (Tex. Civ. App.—Dallas 1976)