New Jersey § 3b:31-39

§ 3b:31-39.

Creditor's Claim Against Settlor. a. Whether or not the terms of a trust contain a spendthrift provision, the following

rules apply: (1) During the lifetime of the settlor, the property of a revocable trust is subject

to claims of the settlor's creditors. (2) With respect to an irrevocable trust, a creditor or assignee of the settlor may

reach the maximum amount that can be distributed to or for the settlor's benefit. If a trust has more than one settlor, the amount the creditor or assignee of a particular

settlor may reach may not exceed the settlor's interest in the portion of the trust

attributable to that settlor's contribution. (3) After the death of a settlor, and subject to the settlor's right to direct the

source from which liabilities will be paid, the property of a trust that was revocable

at the settlor's death is subject to claims of the settlor's creditors, costs of administration

of the settlor's estate, the expenses of the settlor's funeral and disposal of remains,

and to a surviving spouse or partner in a civil union and children to the extent the

settlor's probate estate is inadequate to satisfy those claims, costs, expenses. b. For purposes of this section: (1) during the period the power may be exercised, the holder of a power of withdrawal

is treated in the same manner as the settlor of a revocable trust to the extent of

the property subject to the power; and (2) upon the lapse, release, or waiver of the power, the holder is treated as the

settlor of the trust only to the extent the value of the property affected by the

lapse, release, or waiver exceeds the greater of the amount specified in section 2041(b)(2) or 2514(e) of the federal Internal Revenue Code of 1986 (26 U.S.C. s.2041(b)(2) or 26 U.S.C. s.2514(e) ), or section 2503(b) of the federal Internal Revenue Code of 1986 ( 26 U.S.C. s.2503(b) ), in each case as in effect on the effective date of this act, or as later amended.