Mississippi passed the Qualified Disposition in Trust Act, which permits state residents to create self-settled asset protection trusts. When the transferor places property into a qualified disposition trust, the transferor no longer has control of the transferred property and only retains the powers associated with the trust whenever expressly stated in the trust document.
The statute provides that the transferor has no rights to the trust income or principal other than what the trust allows and that any agreement to the contrary is void. This separation of powers is of particular importance in protecting transferred property from claims by the transferor’s creditors.
Creditors may attempt to avoid a qualified disposition, but the statute limits their reach. A disposition can be avoided only to the extent necessary to satisfy the transferor’s debt to that creditor.
If a court sets aside a disposition, the trustee has a lien for costs and attorney’s fees, and beneficiaries keep distributions they received in good faith. These provisions discourage frivolous challenges and ensure that only legitimate debts threaten the trust.
Mississippi’s act enforces spendthrift clauses. Section 91‑9‑713 states that a spendthrift provision restricting transfer of the transferor’s beneficial interest is valid and enforceable and is recognized under federal bankruptcy law. This means creditors cannot reach the trust assets through the beneficiary, and the trustee cannot voluntarily give assets to a creditor on the beneficiary’s behalf.
To establish a qualified disposition trust, the settlor must work with a trustee who is a Mississippi resident or bank. The trust must include a spendthrift clause, be irrevocable, and state that Mississippi law governs.
While the settlor can be a discretionary beneficiary, they cannot have the power to revoke the trust or direct distributions. Transferors should also be solvent at the time of transfer to avoid fraudulent conveyance claims.
If you’re concerned about protecting your wealth from future creditors, consider whether a Mississippi asset protection trust is right for you. At O’Brien Law Firm, LLC, our attorneys can draft a trust that complies with the statute and balances asset protection with access to funds. Contact us at 662-672-7619 or use our online form to start safeguarding your legacy.
If you’re considering bankruptcy, it’s important to understand how your case could end and how to avoid a frustrating outcome. Most filers hope for a discharge, which wipes out certain debts. However, some cases end in dismissal, which offers no relief at all. Knowing the difference can save you time, money, and stress.
A discharge is the ideal outcome for most debtors. In Chapter 7, it usually happens a few months after you file, while in Chapter 13, you’ll receive it after completing your repayment plan. Once the discharge is granted, creditors can’t come after you for those debts anymore.
That said, not all obligations go away. Student loans, some taxes, and child support may still be collectible. Also, liens on your property might still be valid even if the debt itself is discharged.
Dismissal is the opposite. It means the court has closed your case without granting relief. Creditors are free to resume collection efforts like garnishments, foreclosures, or lawsuits.
Dismissals often happen when a filer misses a key requirement, such as failing to file schedules, skipping the required credit counseling, or not showing up to the 341 meeting with creditors. In Chapter 13, even one missed payment might trigger dismissal.
If you’re filing, keep these basics in mind:
Bankruptcy comes with rules, and they’re easy to trip over if you’re unfamiliar. At O’Brien Law Firm, LLC, we help clients throughout the Greater Memphis Area avoid common mistakes, stay on track, and work toward a discharge whenever possible.
Reach out at 662-672-7619 or use our online form to schedule a consultation. Let’s walk through your options together.
