72-33-304. Transferee or creditor cannot compel trustee to exercise discretion -- liability of trustee for payment to or for beneficiary. - Montana Statutes

     72-33-304. Transferee or creditor cannot compel trustee to exercise discretion -- liability of trustee for payment to or for beneficiary. (1) If the trust instrument provides that the trustee shall pay to or for the benefit of a beneficiary so much of the income or principal or both as the trustee in the trustee's discretion sees fit to pay, a transferee or creditor of the beneficiary may not compel the trustee to pay any amount that may be paid only in the exercise of the trustee's discretion.
     (2) If the trustee has knowledge of the transfer of the beneficiary's interest or has been served with process by a judgment creditor seeking to reach the beneficiary's interest, and the trustee pays to or for the benefit of the beneficiary any part of the income or principal that may be paid only in the exercise of the trustee's discretion, the trustee is liable to the transferee or creditor to the extent that the payment to or for the benefit of the beneficiary impairs the right of the transferee or creditor. This subsection does not apply if the beneficiary's interest in the trust is subject to a restraint on transfer that is valid under 72-33-301 or 72-33-302.
     (3) This section applies regardless of whether the trust instrument provides a standard for the exercise of the trustee's discretion.
     (4) Nothing in this section limits any right the beneficiary may have to compel the trustee to pay to or for the benefit of the beneficiary all or part of the income or principal.

     History: En. Sec. 27, Ch. 685, L. 1989.