Montana Code 72-38-504. Discretionary trusts — effect of standard
72-38-504. Discretionary trusts — effect of standard. (1) Whether or not a trust contains a spendthrift provision, a creditor of a beneficiary may not compel a distribution that is subject to the trustee‘s discretion even if:
Terms Used In Montana Code 72-38-504
- 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, or as later amended. See Montana Code 72-38-103
- 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:
(a)has a present or future beneficial interest in a trust, vested or contingent; or
(b)in a capacity other than that of trustee, holds a power of appointment over trust property. See Montana Code 72-38-103
- Spendthrift provision: means a term of a trust that restrains both voluntary and involuntary transfer of a beneficiary's interest. See Montana Code 72-38-103
- Trustee: A person or institution holding and administering property in trust.
- Trustee: includes an original, additional, and successor trustee and a cotrustee. See Montana Code 72-38-103
(a)the discretion is expressed in the form of a standard of distribution; or
(b)the trustee has abused the discretion.
(2)This section does 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.
(3)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 may 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.