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May a creditor enforce a lien against a property for the owner’s debts when the property is vested in a trust arrangement?

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United States of America v. Robert P. Huckaby et al.

Facts: An owner of California property transfers the property title to themselves as trustee for an out of state trust arrangement in which the state allows trustors, trustees, and beneficiaries of the trust to all be the same individual. The owner retains all rights to ownership as the sole beneficiary of the trust. The owner becomes indebted to a creditor which seeks to enforce a lien they recorded against title to the property.

Claim: The creditor claims the trust is void and the lien is enforceable since California does not allow trusts where the trustee is also the sole beneficiary to prevent creditors from reaching property.

Counterclaim: The owner claims the lien is unenforceable since the property is vested in the trust which is valid in the state where it was created.

Holding: A United States appeals court holds the lien is enforceable since the property is in California where a trust with the same sole trustee and beneficiary to prevent creditors from reaching property is void. [Unites States of America v. Robert P. Huckaby et al. (2026) ___ 9th Cir.___]

Unites States of America v. Robert P. Huckaby et al.

 

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