Problem 1 Duncan Bennett, a single parent, wants to leave his entire estate to his only child, Bonnie. He knows Bonnie is extravagant and often spends her money foolishly; therefore, he establishes a trust with a spendthrift provision to protect Bonnie from her own mismanagement and wasteful habits in spending money. The trust also provides that Bonnie cannot transfer, pledge, or assign her interest in the trust in- come or principal in any manner and that such interest is not to be subject to any of Bonnies creditors claims by attachment, garnishment, execution, or other process of law. Answer the following:

a. Are spendthrift trusts valid in all states?

b. Would this trust be valid in your state? If so, cite the statute.

c. If one of Bonnies creditors supplies her with property items that are obviously necessaries, can that creditor reach (obtain) Bonnies trust income despite the spendthrift clause?

Problem 2 Amy purchased 20 acres of land from Ben. Since Amy was immediately leaving the country to serve in the Peace Corps for two years and was unable to attend the closing, she asked Ben to deed the property to her close friend, Sally. Ben conveyed the property by deed to Sally in her name. When Amy returns, Sally refuses to turn over the property and claims the property was a gift to her from Amy. Amy denies the property was a gift and demands that Sally return the property. Answer and explain the following:

a. Since real property (land) is involved in this case, does the Statute of Frauds apply

b. In this case, can parole evidence be used to determine whether or not a resulting trust is established?

c. If Amy and Sally go to court, what methods might a court use to decide whether Sallys claim is correct?

D. If it goes to court, in your opinion, which party would win this case? See Rainey v. Rainey, 795 S.W.2d 139 (Tenn.App. 1990).

E. If Amy had died while in the Peace Corps, would the property belong to Sally?