[ §554D-506] Overdue distribution.

152 words·~1 min read·/hi/554d-506

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)Regardless of whether 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.

(b)As used 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. [L 2021, c 32, pt of §2]