## Facts

- Will Sligh was catastrophically injured in a drunk-driving automobile collision caused by Gene A. Lorance, an uninsured motorist.
- The Slighs sued Lorance for gross negligence and related damages; Lorance failed to respond.
- The circuit court entered a default judgment against Lorance for $5,000,000 in compensatory and punitive damages.
- Lorance’s only meaningful assets were beneficial interests as a lifetime income beneficiary in two inter vivos spendthrift trusts created by his mother; First National Bank of Holmes County served as trustee.
- The trust instruments granted the trustee broad discretion to distribute income and corpus for the benefit of the settlor and Lorance, including payments to third parties for their benefit.
- The trusts included spendthrift provisions purporting to bar attachment and garnishment and to prevent voluntary or involuntary alienation of Lorance’s interest.
- After judgment, the Slighs initiated garnishment proceedings against the trustee; the bank admitted holding trust property for Lorance but asserted spendthrift protection.
- The matter was transferred to chancery court, which dismissed the Slighs’ complaint, ruling spendthrift trust assets could not be garnished to satisfy tort judgment creditors.

## Issues

1. Whether the chancery court erred by dismissing the Slighs’ complaint without allowing amendment under Mississippi Rule of Civil Procedure 15(a).
2. Whether Mississippi law permits an involuntary tort judgment creditor to reach a beneficiary’s interest in a spendthrift trust, particularly for intentional or grossly negligent misconduct.

## Decision

- The Mississippi Supreme Court reversed and rendered.
- The Court held that spendthrift protections do not provide absolute immunity from claims of involuntary tort creditors.
- The Court recognized a public policy exception permitting attachment of the beneficiary’s interest, at least where the tort involves intentional or grossly negligent conduct.
- The Court held the tort creditors’ claims could take priority over remaindermen’s interests to the extent necessary to satisfy the judgment.
- In light of the merits ruling, dismissal was improper; the Rule 15(a) amendment complaint was unnecessary or moot.

## Legal Principles

- Spendthrift trusts in Mississippi are a judicial doctrine and may be limited by judicially recognized exceptions when public policy requires.
- A meaningful distinction exists between voluntary creditors (who can assess and price risk) and involuntary tort creditors (who cannot bargain to avoid harm).
- Public policy may require allowing an involuntary tort judgment creditor to reach a beneficiary’s interest in a spendthrift trust when the beneficiary’s conduct is intentional or grossly negligent.
- In such circumstances, the tort creditor’s claim may be superior to remainder interests, at least as to distributions or trust value needed to satisfy the judgment.

## Conclusion

Mississippi held that a spendthrift trust clause cannot categorically shield a beneficiary from liability to involuntary tort victims harmed by the beneficiary’s intentional or grossly negligent misconduct, and it permitted attachment of the beneficiary’s trust interest with priority over remaindermen to satisfy the tort judgment.


Sligh v. First Nat’l Bank of Holmes Cnty., 704 So. 2d 1020 (Miss. 1997)