## Facts

- Robert W. Sessions created the Sessions Family Trust in 1994, a trust for his own benefit that included a spendthrift clause barring trust assets from paying his creditors or his estate’s creditors.
- Sessions transferred substantial assets to the trust, including a 99% limited partnership interest and Illinois real property; the trust was worth roughly $19 million at his death.
- In 1995, Sessions made an irrevocable $1.5 million charitable pledge to Rush University Medical Center to fund construction of a university president’s residence.
- In 1996, Sessions confirmed that if the pledge was unpaid at death it would be paid “as a debt,” and that if the pledge was unenforceable for any reason, an equivalent cash distribution would be made to Rush.
- Rush built the residence in reliance on the pledge at a cost exceeding $1.5 million; the residence bore Sessions’s name.
- After a 2005 cancer diagnosis, Sessions executed a new will revoking prior wills and omitting payment of the pledge; he also arranged his affairs so that few assets remained outside the 1994 trust.
- Sessions died in 2005 without paying any portion of the pledge, and the probate estate lacked sufficient assets to satisfy Rush’s judgment on the pledge.
- Rush initiated a supplemental proceeding to reach assets held in the 1994 trust despite its spendthrift clause.

## Issues

1. Whether Illinois law permits a settlor to create a trust for his own benefit containing a spendthrift clause that bars the settlor’s present and future creditors from reaching trust assets.
2. Whether the Illinois Uniform Fraudulent Transfer Act (UFTA) displaces the common-law rule against enforcing self-settled spendthrift trusts as to the settlor’s creditors, making UFTA the exclusive creditor remedy.

## Decision

- The Illinois Supreme Court reversed the appellate court and reinstated the circuit court’s summary judgment for Rush.
- The court held that, under Illinois common law, a settlor cannot place assets in a trust for his own benefit and use a spendthrift clause to defeat creditor claims.
- The court held that UFTA did not abrogate or preempt the common-law rule; creditors are not limited to UFTA fraudulent-transfer theories to reach a self-settled spendthrift trust.
- The spendthrift provision was void as to Sessions’s creditors, permitting Rush to reach trust assets to satisfy its judgment on the unpaid pledge.

## Legal Principles

- A trust that is self-settled (created for the settlor’s own benefit) cannot validly shield the settlor’s beneficial interest from the settlor’s creditors through a spendthrift clause.
- The invalidity of a self-settled spendthrift restriction as to creditors is a common-law rule not dependent on proof of actual fraud.
- Statutes are not presumed to displace common law beyond what the legislature expressly declares; absent clear legislative intent, common-law creditor remedies remain available.
- UFTA provides remedies for certain fraudulent transfers but does not supply the exclusive means to reach assets placed in a self-settled spendthrift trust.

## Conclusion

Illinois law bars a debtor from insulating assets from creditors by creating a trust for the debtor’s own benefit with spendthrift protections, and the UFTA does not eliminate that rule; accordingly, Rush could satisfy its pledge judgment from the trust assets despite the spendthrift clause.


Rush Univ. Med. Ctr. v. Sessions, 980 N.E.2d 45 (Ill. 2012)