Scott v. Bank One Trust Co., N.A.

Jeanette G. Brewer’s son, John McCombe (defendant), had significant debts. Although Brewer wanted to leave her estate to McCombe, she did not want her estate to benefit McCombe’s creditors. Accordingly, she created a trust that directed the trustee, Bank One Trust Co., N.A. (Bank One) (defendant), to distribute Brewer’s assets outright to McCombe on Brewer’s death, but not if (1) McCombe was insolvent; (2) McCombe had filed a petition for bankruptcy; or (3) McCombe would not personally enjoy the trust estate. If Bank One could not transfer the trust estate to McCombe outright, then the trust became a discretionary trust for McCombe and his three children. When Brewer died in 1984, Bank One determined that McCombe was insolvent and would not personally enjoy the trust assets. The trust became a discretionary trust. In 1986 McCombe filed a petition for bankruptcy. The bankruptcy trustee, Thomas C. Scott (plaintiff), filed a complaint in the bankruptcy court seeking an order declaring the trust invalid as an unenforceable spendthrift trust and directing Bank One to turn the trust assets over to McCombe’s bankruptcy estate. The bankruptcy court found in favor of Scott, and McCombe and Bank One appealed to the district court. The district court certified the question of whether spendthrift trusts were valid in Ohio to the Ohio Supreme Court.