§ 14-10506 — Overdue distribution; definition

Arizona § 14-10506

• Jurisdiction: Arizona
• Title 14: Arizona Revised Statutes
• Ch. 11: ARIZONA TRUST CODE
• Art. 5: Creditors' Claims; Spendthrift and Discretionary Trusts

Text

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.

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.