163.4185 - Classifications of distribution interests.
163.4185 Classifications of distribution interests.
1. A distribution interest may be classified as:
(a) A mandatory interest if the trustee has no discretion to determine whether a distribution should be made, when a distribution should be made or the amount of the distribution.
(b) A support interest if the distribution of a support interest contains a standard for distribution for the support of a person which may be interpreted by the trustee or a court, as necessary. A provision in a trust which provides a support interest may contain mandatory language which a trustee must follow.
(c) A discretionary interest if the trustee has discretion to determine whether a distribution should be made, when a distribution should be made and the amount of the distribution.
2. If a trust contains a combination of a mandatory interest, a support interest or a discretionary interest, the trust must be separated as:
(a) A mandatory interest only to the extent of the mandatory language provided in the trust;
(b) A support interest only to the extent of the support language provided in the trust; and
(c) A discretionary interest for any remaining trust property.
3. If a trust provides for a support interest that also includes mandatory language but the mandatory language is qualified by discretionary language, the support interest must be classified and separated as a discretionary interest.
(Added to NRS by 2009, 786)