35-15-504 - Discretionary trusts Effect of standard. - Tennessee Statutes

35-15-504. Discretionary trusts Effect of standard.

(a)  Whether or not a trust contains a spendthrift provision, a creditor of a beneficiary may not compel a distribution that is subject to the trustee's discretion, even if:

     (1)  The discretion is expressed in the form of a standard of distribution; or

     (2)  The trustee has abused the discretion.

(b)  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.

(c)  If the trustee's or co-trustee's discretion to make distributions for the trustee's or co-trustee's own benefit is limited by an ascertainable standard, a creditor may not reach or compel distribution of the beneficial interest except to the extent the interest would be subject to the creditor's claim were the beneficiary not acting as trustee or co-trustee.

[Acts 2004, ch. 537, § 43; 2007, ch. 24, § 22.]