A. 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 if the trustee has not made the distribution to the beneficiary within a reasonable period after the mandated distribution date unless the terms of the trust expressly authorize the trustee to delay the distribution to protect the beneficiary’s interest in the distribution.

will 560x170

Ask a will, trust or estate question, get an answer ASAP!
Thousands of highly rated, verified estate & trust lawyers.
Click here to chat with a lawyer about your rights.

Terms Used In Arizona Laws 14-10506

  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • Beneficiary: means a person who either:

    (a) Has a present or future beneficial interest in a trust, vested or contingent. See Arizona Laws 14-10103

  • including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
  • Power of withdrawal: means a presently exercisable general power of appointment other than a power exercisable either:

    (a) By a trustee and limited by an ascertainable standard. See Arizona Laws 14-10103

  • Spendthrift provision: means a term of a trust that restrains either voluntary or involuntary transfer of a beneficiary's interest. See Arizona Laws 14-10103
  • Trust: includes an express trust, private or charitable, with any additions, wherever and however created. See Arizona Laws 14-1201
  • Trustee: A person or institution holding and administering property in trust.
  • Trustee: includes an original, additional and successor trustee and a cotrustee. See Arizona Laws 14-10103

B. For the purposes of 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 amount for a stated age, a distribution to be made pursuant to the exercise of a power of withdrawal and a distribution on termination of the trust. Mandatory distribution does not include a distribution that is subject to the exercise of the trustee’s discretion even if:

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

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

  Previous section
Next section  
 Article 5 Contents