Regardless of whether or not a trust contains a spendthrift provision:

(1) No beneficial interest, power of appointment, or reserved power in a trust shall be judicially foreclosed;
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Terms Used In Tennessee Code 35-15-509

  • Beneficial interest: means a distribution interest or a remainder interest. See Tennessee Code 35-15-103
  • Decedent: A deceased person.
  • Power of appointment: means :
    (A) An inter vivos or testamentary power to direct the disposition of trust property, other than a distribution decision made by a trustee or other fiduciary to a beneficiary. 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
  • Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
  • Remainder interest: means an interest under which a trust beneficiary will receive property held by a trust outright at some time during the future. See Tennessee Code 35-15-103
  • Reserved power: means a power held by a settlor. 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
(2) No creditor or assignee shall reach a power of appointment or a remainder interest at the trust level and such creditor or assignee shall wait until any funds are distributed relative to such power of appointment or remainder interest before such creditor or assignee may reach such funds;
(3) No creditor or assignee shall reach property transferred pursuant to a power of appointment exercised by a decedent unless the power of appointment was actually exercised in favor of the decedent or the decedent’s estate; and
(4) No power of appointment is a property interest.
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