55-545.04 - Discretionary trusts; effect of standard. - Virginia Statutes

§ 55-545.04. Discretionary trusts; effect of standard.

A. In this section, "child" includes any person for whom an order orjudgment for child support has been entered in this or another state.

B. Except as otherwise provided in subsection C and § 55-545.03:1, whether ornot a trust contains a spendthrift provision, a creditor of a beneficiary maynot compel a distribution that is subject to the trustee's discretion, evenif:

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

2. The trustee has abused the discretion.

C. To the extent a trustee has not complied with a standard of distributionor has abused a discretion:

1. A distribution may be ordered by the court to satisfy a judgment or courtorder against the beneficiary for support or maintenance of the beneficiary'schild; and

2. The court shall direct the trustee to pay to the child such amount as isequitable under the circumstances but not more than the amount the trusteewould have been required to distribute to or for the benefit of thebeneficiary had the trustee complied with the standard or not abused thediscretion.

D. This section does not limit the right of a beneficiary to maintain ajudicial proceeding against a trustee for an abuse of discretion or failureto comply with a standard for distribution.

E. A creditor may not reach the interest of a beneficiary who is also atrustee or cotrustee, or otherwise compel a distribution, if the trustee'sdiscretion to make distributions for the trustee's own benefit is limited byan ascertainable standard.

(2005, c. 935.)