(a) A discretionary interest is neither a property interest nor an enforceable right; it is a mere expectancy.
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Terms Used In Tennessee Code 35-15-504

  • Ascertainable standard: means a standard relating to an individual's health, education, support or maintenance within the meaning of §. See Tennessee Code 35-15-103
  • 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 that has a present or future beneficial interest in a trust, vested or contingent. See Tennessee Code 35-15-103
  • Fiduciary: A trustee, executor, or administrator.
  • Fiduciary: means :
    (A) A trustee, conservator, guardian, agent under any agency agreement or other instrument, an executor, personal representative or administrator of a decedent's estate, or any other party, including a trust advisor or a trust protector, who is acting in a fiduciary capacity for any person, trust, or estate. See Tennessee Code 35-15-103
  • Person: means an individual. See Tennessee Code 35-15-103
  • Property: means anything that may be the subject of ownership, whether real or personal, legal or equitable, or any interest therein. See Tennessee Code 35-15-103
  • Reach: means , with respect to a distribution interest or any power held by anyone relative to a trust, to subject such distribution interest or such power to a judgment, decree, garnishment, attachment, execution, levy, creditor's bill or other legal, equitable, or administrative process, relief, or control of any court, tribunal, agency, or other entity that, by power of law, is provided with powers or jurisdiction similar to those described in this subdivision (25). See Tennessee Code 35-15-103
  • Spendthrift provision: means a term of a trust which restrains both voluntary and involuntary transfer of a beneficiary's interest. See Tennessee Code 35-15-103
  • Trustee: A person or institution holding and administering property in trust.
  • Trustee: includes an original, additional, and successor trustee, and a cotrustee. See Tennessee Code 35-15-103
(b) Relative to a discretionary interest, whether or not a trust contains a spendthrift provision:

(1) No creditor or assignee shall force or otherwise reach a distribution with regard to a discretionary interest;
(2) No creditor or assignee shall require a trustee, cotrustee or other fiduciary to exercise the trustee‘s, cotrustee’s or other fiduciary‘s discretion to make a distribution with regard to a discretionary interest;
(3) Regardless of whether a beneficiary has any outstanding creditors or assignees, a trustee, cotrustee or other fiduciary of a discretionary interest may directly pay any expense on behalf of such beneficiary and may exhaust the income and principal of the trust for the benefit of such beneficiary;
(4) No trustee, cotrustee or other fiduciary is liable to any creditor or assignee for paying the expenses of a beneficiary of a discretionary interest;
(5)

(A) Regardless of whether a beneficiary holding a discretionary interest is also a trustee, cotrustee or other fiduciary, subdivisions (b)(1)-(4) remain applicable if:

(i) The beneficiary-fiduciary does not have the discretion to make or participate in making distributions to such beneficiary-fiduciary;
(ii) The beneficiary-fiduciary’s discretion to make or participate in making distributions to such beneficiary-fiduciary is limited by an ascertainable standard; or
(iii) The beneficiary-fiduciary’s discretion to make or participate in making distributions to such beneficiary-fiduciary is exercisable only with the consent of a cotrustee or another person holding an adverse interest;
(B) A creditor or assignee may compel or otherwise reach a distribution only to the extent the creditor or assignee may compel or otherwise reach a distribution if the beneficiary was not acting as a trustee, cotrustee or other fiduciary.
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