§ 59-13-04 — (504) Discretionary trusts - Effect of standard

North Dakota § 59-13-04

• Jurisdiction: North Dakota
• Title 59: Trusts, Uses, and Powers
• Ch. 59-13: Creditor's Claims - Spendthrift and Discretionary Trusts

Text

1. In this section, "child" includes any person for whom an order or judgment for child
support has been entered by a court of competent jurisdiction.
2. Except as otherwise provided in subsection 3, 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 the discretion is expressed in the form of a
standard of distribution, or the trustee has abused the discretion.
3. To the extent a trustee has not complied with a standard of distribution or has abused
a discretion, 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,
spouse, or former spouse and the court shall direct the trustee to pay the child,
spouse, or former spouse such amount as is equitable under the circumstances but
not 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.

4. 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.
5. 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 if the beneficiary was not acting as trustee or
cotrustee.