35-15-506 - Overdue distribution. - Tennessee Statutes

35-15-506. Overdue distribution.

(a)  In this section, “mandatory distribution” means a distribution of income or principal that the trustee is required to make to a beneficiary under the terms of the trust, including a distribution upon termination of the trust. “Mandatory distribution” does not include a distribution subject to the exercise of the trustee's discretion even if:

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

     (2)  The terms of the trust authorizing a distribution couple language of discretion with language of direction.

(b)  Whether or not a trust contains a spendthrift provision, a creditor or assignee of a beneficiary may reach a mandatory distribution of income or principal, including a distribution upon termination of the trust, if the trustee has not made the distribution to the beneficiary within a reasonable time after the designated distribution date.

[Acts 2004, ch. 537, § 45; 2007, ch. 24, § 25.]