In New York, what portion of trust income is exempt from creditors?

• A. 0%
• B. 50%
• C. 90%
• D. 100%

Answer: (C)

New York law provides protection for the beneficiary’s interest in trust income through spendthrift provisions. If a trust is drafted to be spendthrift and is valid under New York rules, the income the beneficiary receives from the trust is largely shielded from the beneficiary’s creditors. Specifically, about 90% of the trust income is exempt from creditors, meaning creditors can reach only a small portion (the remaining 10% under this framework). The other percentages don’t fit the protective framework typically taught in NY law for trust income. So, the correct amount is 90%.