Rush University Medical Center v. Sessions, 2012 IL 112906

Reviewed by Elizabeth A. Tresp, JD, LL.M., trust & probate litigator · Updated August 2026

How it is commonly cited

As “the Cook Islands trust case” and as a fraudulent-transfer case. It is neither. The analysis is pure Illinois common law, and the court went out of its way to say fraud was beside the point.

What the court actually held

From the official syllabus: “The common law rule that a self-settled spendthrift trust is void as to existing and future creditors is not abrogated by the Uniform Fraudulent Transfer Act embodied in the Illinois statutes, even though the common law rule treats as fraudulent what the Act considers nonfraudulent.”

• UFTA § 11 provides that the common law “relating to… fraud… supplement[s]” the Act absent clear displacement. There was no displacement.
• The common-law rule “operates irrespective of fraud… it recognizes that the creation of such a trust can be made without any fraudulent intent.” What voids it is the combination of the spendthrift provision and the settlor’s retention of the benefits.
• Rush was a “creditor” even though it never obtained a judgment against Sessions during his lifetime, because the pledge obligation was incurred while he lived.
• Creditors’ rights are not extinguished by the settlor’s death: “there is no sound reason to treat the creditors’ rights as suddenly defeated the moment the settlor dies, thereby giving the commensurate economic benefit to the settlor’s heirs.”
• The reachable interest includes all income and principal that could have been distributed to the settlor, “even when the trustee exercises complete discretion.”

What actually happened

Summary judgment for Rush was reinstated: the 1994 trust was liable to pay $1.5 million on Sessions’s philanthropic pledge.

The underlying structure was a Cook Islands trust in which the trustee, subject to Sessions’s own power as protector, could distribute principal and income to him in unlimited amounts for his “maintenance, support, education, comfort, well-being, pleasure, desire or happiness.” The court never needed to reach offshore law.

The planning lesson

This is the case that matters most in non-DAPT states, and it is the strongest argument for why domicile drives the analysis. In a state that retains the common-law rule, a self-settled spendthrift provision is vulnerable regardless of intent, regardless of timing, and regardless of what the fraudulent-transfer statute would permit. Note too the retained protector power and the extraordinarily broad distribution standard, “pleasure, desire or happiness” is not a standard, and a trustee with unlimited discretion to benefit the settlor gives a court everything it needs.

Why this matters for your plan

Reading the cases is not an academic exercise. Every one of these decisions turned on something a planner controls: when the structure was created, how much control the settlor kept, whether the governing-law choice was backed by real contacts, and whether the client told the truth on the record. We build to the way these disputes are actually litigated, because Elizabeth litigates them. To discuss how your situation maps onto this body of law, call (858) 755-6672.