## Facts

- A grandmother created the Kyle Krueger Irrevocable Trust in 1985 for Kyle Krueger’s benefit.
- The trust required the trustee to distribute all net income to Krueger at least quarterly and allowed discretionary principal distributions for Krueger’s maintenance, support, and education.
- The trust barred both voluntary and involuntary transfer of trust income or principal and purported to prevent creditors from reaching distributions before receipt by the beneficiary.
- Lorie Scheffel sued Krueger for torts arising from the alleged sexual assault of her minor child, including videotaping and broadcasting the act over the internet.
- The trial court entered a default judgment against Krueger for $551,286.25.
- Scheffel brought a trustee process action against Citizens Bank NH, as trustee, seeking to reach Krueger’s beneficial interest to satisfy the judgment.
- The trial court dismissed, ruling the spendthrift provision was valid under RSA 564:23 and shielded the trust from Scheffel’s claim.

## Issues

1. Whether RSA 564:23’s spendthrift protection permits a tort judgment creditor to reach a beneficiary’s interest in a spendthrift trust.
2. Whether a court may recognize a public-policy exception allowing tort creditors to reach spendthrift trust assets when the beneficiary’s conduct is egregious or criminal.
3. Whether the trust should terminate for failure of purpose because Krueger’s incarceration allegedly prevented fulfillment of the trust’s support objectives.

## Decision

- The Supreme Court of New Hampshire affirmed dismissal of the trustee process action.
- The court held the trust’s spendthrift provision was valid and enforceable under RSA 564:23 and barred Scheffel, as a tort creditor, from reaching Krueger’s interest before distribution.
- The court declined to create a judicial public-policy exception not found in the statute.
- The court held the trust had not failed of purpose; incarceration did not render support and maintenance distributions impossible.

## Legal Principles

- A valid spendthrift provision, authorized by statute, protects a beneficiary’s interest in future trust payments from creditor claims unless a statutory exception applies.
- When a statute enumerates specific exceptions to spendthrift protection, courts presume no additional exceptions were intended and will not add an unlisted tort-creditor exception.
- Courts will not override clear statutory language by crafting a public-policy exception to spendthrift protections.
- A support/maintenance trust does not terminate merely because the beneficiary is incarcerated; the trust’s purpose may still be fulfilled during imprisonment and after release.

## Conclusion

The court enforced statutory spendthrift protections to bar a tort judgment creditor from attaching a beneficiary’s interest in an irrevocable spendthrift trust, refused to add a public-policy exception for criminal conduct, and rejected termination based on alleged failure of the trust’s support purpose due to incarceration.


Scheffel v. Krueger, 146 N.H. 669, 782 A.2d 410 (N.H. 2001)