(a) Except as otherwise provided in subsection (b), regardless of whether a trust contains a spendthrift provision, a creditor of a beneficiary shall not compel a distribution that is subject to the trustee‘s discretion, even if:

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Terms Used In Hawaii Revised Statutes 554D-504

  • Ascertainable standard: means a standard relating to an individual's health, education, support, or maintenance within the meaning of section 2041(b)(1)(A) or 2514(c)(1) of the Internal Revenue Code of 1986, as in effect on the effective date of this chapter. See Hawaii Revised Statutes 554D-103
  • 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:

    (1) Has a present or future beneficial interest in a trust, vested or contingent; or
    (2) In a capacity other than that of trustee, holds a power of appointment over trust property. See Hawaii Revised Statutes 554D-103
  • Court: means the circuit court in this State having jurisdiction over all subject matter relating to trusts. See Hawaii Revised Statutes 554D-103
  • Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
  • Spendthrift provision: means a term of a trust that restrains both voluntary and involuntary transfer of a beneficiary's interest. See Hawaii Revised Statutes 554D-103
  • Trustee: A person or institution holding and administering property in trust.
  • Trustee: includes an original, additional, and successor trustee, and a cotrustee. See Hawaii Revised Statutes 554D-103
(1) The discretion is expressed in the form of a standard of distribution; or
(2) The trustee has abused the discretion.
(b) To the extent a trustee has not complied with a standard of distribution or has abused a discretion:

(1) A distribution may be ordered by the court to satisfy a judgment or court order against the beneficiary for support or maintenance of the beneficiary’s child; and
(2) The court shall direct the trustee to pay to or for the benefit of the beneficiary’s child, an amount as is equitable under the circumstances but no more than the amount the trustee would have been required to distribute to or for the benefit of the beneficiary had the trustee complied with the standard or not abused the discretion.
(c) This section shall 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.
(d) If the trustee’s or cotrustee’s discretion to make distributions for the trustee’s or cotrustee’s own benefit is limited by an ascertainable standard, a creditor shall 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 cotrustee.

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