Section 456.5-504

Title XXXI TRUSTS AND ESTATES OF DECEDENTS AND PERSONS UNDER DISABILITY

Chapter 456

Effective - 28 Aug 2006, 3 histories, see footnote   (history) 

  456.5-504.  Discretionary trusts, interest not enforceable, when — applicability — effect of standard. — 1.  A beneficiary's interest in a trust that is subject to the trustee's discretion does not constitute an interest in property or an enforceable right even if the discretion is expressed in the form of a standard of distribution or the beneficiary is then serving as a trustee or cotrustee.  A creditor or other claimant may not attach present or future distributions from such an interest or right, obtain an order from a court forcing the judicial sale of the interest or compelling the trustee to make distributions, or reach the interest or right by any other means, even if the trustee has abused the trustee's discretion.

  2.  This section does not limit the right of a beneficiary to maintain a judicial proceeding against a trustee for an abuse of discretion or failure to comply with a standard for distribution.

  3.  This section applies whether or not an interest is subject to a spendthrift provision.

  4.  For purposes of this section, a beneficiary's interest in a trust is subject to the trustee's discretion if that interest does not constitute a mandatory distribution as defined in subsection 1 of section 456.5-506.

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(L. 2004 H.B. 1511, A.L. 2006 S.B. 892)