In Badenhorst v Badenhorst the court stated that the company law doctrine of piercing the veil should be extended to trust law. … The research explored the circumstances that warrants the piercing of a trust veil and it was found that the court is likely to pierce a trust veil if the trust form was abused.
Consequently, can a trust be pierced?
Spouses or children of the beneficiary may be able to take the trust assets if the beneficiary does not meet his financial obligations to them. … Finally, if the beneficiary has any back taxes or must pay any damages imposed by a court, the trust can be pierced to obtain the necessary funds to settle the debt.
One may also ask, can creditors go after a trust?
A revocable trust, sometimes called a living trust, holds the assets of a trust creator (called a “grantor,” “settlor,” or “trustor”) during his or her lifetime. … As a result, a creditor could go after the trust, seek its termination, and gain access to assets within it.
