§ 36C-5-504. Discretionary trusts; effect of standard.
§ 36C‑5‑504. Discretionary trusts; effect of standard.
(a) In this section:
(1) "Child"includes any person for whom an order or judgment for child support has beenentered in this or another state.
(2) "Discretionarytrust interest" means an interest in a trust that is subject to thetrustee's discretion, whether or not the discretion is expressed in the form ofa standard of distribution. A discretionary trust interest shall include aninterest in any one or any combination of the following:
a. A trust in which theamount to be received by the beneficiary, including whether or not thebeneficiary, or a class of beneficiaries, is to receive anything at all, iswithin the discretion of the trustee.
b. A trust in which thetrustee has no duty to pay or distribute any particular amount to thebeneficiary, but has only a duty to pay or distribute to the beneficiary, orapply on behalf of the beneficiary, those sums that the trustee, in thetrustee's discretion, determines are appropriate for the support, education, ormaintenance of the beneficiary.
(b) The beneficiary maynot transfer a discretionary trust interest. Except as otherwise provided inthis Article, a creditor or assignee of a beneficiary may not reach adiscretionary trust interest or a distribution by the trustee before itsreceipt by the beneficiary.
(c) Except as providedin subsection (d) of this section, a creditor of a beneficiary may not compel adistribution from a trust in which the beneficiary has a discretionary trustinterest even if the trustee has abused the trustee's discretion.
(d) To the extent thata trustee has not complied with a standard of distribution or has abused adiscretion:
(1) A distribution maybe ordered by the court to satisfy a judgment or court order against the beneficiaryfor support or maintenance of the beneficiary's child; and
(2) The court shalldirect the trustee to pay to the child an amount that is equitable under thecircumstances but not more than the amount the trustee would have been requiredto distribute to or for the benefit of the beneficiary had the trustee compliedwith the standard or not abused the discretion.
(e) This section doesnot limit the right of a beneficiary to maintain a judicial proceeding againsta trustee for an abuse of discretion or failure to comply with a standard fordistribution.
(f) A creditor may notreach the interest of a beneficiary who is also a trustee or cotrustee, orotherwise compel a distribution, if the trustee's discretion to makedistributions for the trustee's own benefit is limited by an ascertainablestandard. (2005‑192,s. 2.)