As used in this chapter, unless the context otherwise requires: (1) "Action" with respect to an act of a trustee, includes a failure to act; (2) "Another state" or "other state" means any state other than this state; (3) "Ascertainable standard" means a standard relating to an individual's health, education, support or maintenance within the meaning of § 2041(b)(1)(A) or § 2514(c)(1) of the Internal Revenue Code of 1986 (U.S.C. § 2041(b)(1)(A) and § 2514(c)(1)), as in effect on July 1, 2004, or as later amended; (4) "Beneficial interest" means a distribution interest or a remainder interest; provided, however, that a beneficial interest specifically excludes a power of appointment or a power reserved by a settlor; (5) "Beneficiary" means a person that has a present or future beneficial interest in a trust, vested or contingent; (6) "Charitable trust" means a trust, or portion of a trust, created for a charitable purpose described in § 35-15-405(a) ; (7) "Conservator" has the same meaning as in § 34-1-101 ; (8) "Directed trust" means a trust where either through the terms of the trust, an agreement of the qualified beneficiaries or a court order, one or more persons are given the authority to direct or consent to a fiduciary's actual or proposed investment decision, distribution decision, or any other decision of the fiduciary; (9) "Disinterested trustee" means a trustee that is not a related or subordinate party, as defined in 26 U.S.C. § 672(c) , with respect to the grantor or a qualified beneficiary if the qualified beneficiary were the grantor for purposes of 26 U.S.C. § 672(c) ; (10) "Distribution beneficiary" means a beneficiary who is an eligible distributee or permissible distributee of the income or principal of a trust; (11) "Distribution interest" means: (A) An interest, other than a remainder interest, held by a distribution beneficiary under a trust and may be a current distribution interest or a future distribution interest; (B) Relative to a distribution interest: (i) Neither the existence of a distribution interest or the provision of services by a spouse in that spouse's capacity as a fiduciary of the trust creating the distribution interest is relevant in the equitable division of marital property; (ii) None of the factors in subdivision (11)(B)(i) or the exercise or nonexercise of any power or discretion by a spouse in that spouse's capacity as a fiduciary of the trust creating the distribution interest (even if that spouse is also a beneficiary of the trust creating the distribution interest) are relevant to, indicative of or effect the transmutation or other conversion of separate property to community property; (iii) The expending of any community funds by a spouse in that spouse's capacity as a fiduciary of the trust creating the distribution interest relative to the operation or maintenance of property related to a distribution interest is not relevant to or indicative of, and does not effect a transmutation or other conversion of separate property to community property; (iv) Any funds expended pursuant to subdivision (11)(B)(iii) shall be valid debts of the trust and shall be repaid to the community with appropriate interest; (C) A distribution interest is classified as either a mandatory interest, a support interest or a discretionary interest; and although not the exclusive means to create each such respective distribution interest, absent clear and convincing evidence to the contrary, use of the example language accompanying the following definitions of each such respective distribution interest results in the indicated classification of distribution interest: (i) A mandatory interest means a distribution interest in which the timing of any distribution must occur within one (1) year from the date the right to the distribution arises and the trustee has no discretion in determining whether a distribution shall be made or the amount of such distribution; example distribution language indicating a mandatory interest includes, but is not limited to: (a) All income shall be distributed to a named beneficiary; or (b) One hundred thousand dollars ($100,000) a year shall be distributed to a named beneficiary; (ii) A support interest means a distribution interest that is not a mandatory interest but still contains mandatory language such as "shall make distributions" and is coupled with a standard capable of judicial interpretation; example distribution language indicating a support interest includes, but is not limited to: (a) The trustee shall make distributions for health, education, maintenance, and support; (b) Notwithstanding the distribution language used, if a trust instrument containing such distribution language specifically provides that the trustee exercise discretion in a reasonable manner with regard to a discretionary interest, then notwithstanding any other provision of this subdivision (11) defining distribution interests, the distribution interest shall be classified as a support interest; (iii) A discretionary interest means any interest that is not a mandatory or a support interest and is any distribution interest where a trustee has any discretion to make or withhold a distribution; example distribution language indicating a discretionary interest includes, but is not limited to: (a) The trustee may, in the trustee's sole and absolute discretion, make distributions for health, education, maintenance, and support; (b) The trustee, in the trustee's sole and absolute discretion, shall make distributions for health, education, maintenance, and support; (c) The trustee may make distributions for health, education, maintenance, and support; (d) The trustee shall make distributions for health, education, maintenance, and support; provided, however, that the trustee may exclude any of the beneficiaries or may make unequal distributions among them; or (e) The trustee may make distributions for health, education, maintenance, support, comfort, and general welfare; (f) A discretionary interest may also be evidenced by: (1) Permissive distribution language such as "may make distributions"; (2) Mandatory distribution language that is negated by the discretionary distribution language contained in the trust such as "the trustee shall make distributions in the trustee's sole and absolute discretion"; (g) An interest that includes mandatory distribution language such as "shall" but is subsequently qualified by discretionary distribution language shall be classified as a discretionary interest and not as a support or a mandatory interest; (D) (i) To the extent a trust contains distribution language indicating the existence of any combination of a mandatory, support and discretionary interest, that combined interest of the trust shall be divided and treated separately as follows: (a) The trust shall be a mandatory interest only to the extent of the mandatory distribution language; (b) The trust shall be a support interest only to the extent of such support distribution language; and (c) The remaining trust property shall be held as a discretionary interest; (ii) For purposes of this subdivision (11)(D), a support interest that includes mandatory distribution language such as "shall" but is subsequently qualified by discretionary distribution language, shall be classified as a discretionary interest and not as a support interest; (12) "Environmental law" means a federal, state, or local law, rule, regulation, or ordinance relating to protection of the environment; (13) "Excluded fiduciary" means any trustee, trust advisor, or trust protector to the extent that, under the terms of a trust, an agreement of the qualified beneficiaries, an exercise of the authority described in § 35-15-716 , or court order: (A) The trustee, trust advisor, or trust protector is excluded from exercising a power, or is relieved of a duty; and (B) The power or duty is granted or reserved to another person; (14) "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; (B) Fiduciary also means a trustee as defined in § 35-14-102 ; (C) For purposes of subdivision (14)(A), an agency agreement includes but is not limited to, any agreement under which any delegation is made, either pursuant to § 35-15-807 or by anyone holding a power or duty pursuant to part 12; (D) For purposes of the definition of fiduciary in this subdivision (14), fiduciary does not mean any person who is an excluded fiduciary as such is defined in this section; (15) "Foreign" or "foreign country" means any jurisdiction, subdivision, territory or possession thereof, other than that of the United States of America or of a state; (16) "Foreign jurisdiction" means any jurisdiction, subdivision, territory or possession thereof, other than this state; (17) "Guardian" has the same meaning as in § 34-1-101 . The term does not include a guardian ad litem; (18) "Interests of the beneficiaries" means the beneficial interests provided in the terms of the trust; (19) "Internal Revenue Code" means the Internal Revenue Code of 1986 (U.S.C. title 26), as in effect on July 1, 2004, or as later amended; (20) "Jurisdiction" with respect to a geographic area, includes a state or country; (21) "Person" means an individual; corporation; business trust; estate; trust or civil law equivalent of a trust, including a fideicomiso or equivalent, or a foundation of the equivalent; partnership; limited liability company; association; joint venture; government; governmental subdivision, agency, or instrumentality; public corporation; or any other legal or commercial entity; (22) "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; (B) Powers of appointment are held by the person to whom such power has been given, and not by a settlor in that person's capacity as settlor; (23) "Power of withdrawal" means a presently exercisable general power of appointment other than a power: (A) Exercisable by a trustee and limited by an ascertainable standard; or (B) Exercisable by another person only upon consent of the trustee or a person holding an adverse interest; (24) "Property" means anything that may be the subject of ownership, whether real or personal, legal or equitable, or any interest therein; (25) "Qualified beneficiary" means a beneficiary who, assuming the nonexercise of all powers of appointment and the nonoccurrence of any event not reasonably expected to occur, on the date the beneficiary's qualification is determined: (A) Is a distributee or permissible distributee of trust income or principal; (B) Would be a distributee or permissible distributee of trust income or principal if the interests of the distributees described in subdivision (25)(A) terminated on that date without causing the trust to terminate; or (C) Would be a distributee or permissible distributee of trust income or principal if the trust terminated on that date; (D) (i) Notwithstanding any other provisions of this subdivision (25), no ultimate beneficiary or potential ultimate beneficiary shall be a qualified beneficiary; (ii) In determining who is or may be an ultimate beneficiary, all of the following shall be taken into consideration: (a) The terms of the trust naming any ultimate beneficiary or potential ultimate beneficiary and the intention of the settlor relative to any such beneficiary as expressed in such terms; and (b) Any terms or provisions related to the exercise of any power by any person naming any ultimate beneficiary or potential ultimate beneficiary and the intention of the person exercising such power relative to any such beneficiary as expressed in such terms or provisions; (iii) Determined as provided in subdivision (25)(D)(ii), an ultimate beneficiary or potential ultimate beneficiary is any beneficiary who the settlor or power holder did not reasonably anticipate would take any interest upon termination of all or any part of a trust absent all other beneficiaries or members of classes of beneficiaries named in the trust instrument or in the exercise of the power, respectively, predeceasing or otherwise not being in existence at the time at which such trust or part thereof terminates; (iv) By way of example and not in limitation of this subdivision (25)(D), an ultimate beneficiary is a person or persons often included in a trust instrument or under the exercise of a power to take an interest in a trust at the time all or any part of such trust terminates only in a case where all other named beneficiaries or classes of beneficiaries that have or had an affinity through either familial connection or friendship with any of: (a) The settlor; (b) The person holding any power; or (c) Any prior beneficiary or potential beneficiary of the trust; are predeceased or are otherwise not in existence at the time all or any part of the trust terminates; (26) "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 (26); (27) "Remainder interest" means an interest under which a trust beneficiary will receive property held by a trust outright at some time during the future; relative to a remainder interest: (A) Neither the existence of a remainder interest or the provision of services by a spouse in that spouse's capacity as a fiduciary of the trust creating the remainder interest is relevant in the equitable division of marital property; (B) None of the factors in subdivision (27)(A) or the exercise or non-exercise of any power or discretion by a spouse in that spouse's capacity as a fiduciary of the trust creating the remainder interest (even if that spouse is also a beneficiary of the trust creating the remainder interest) are relevant to, indicative of or effect the transmutation or other conversion of separate property to community property; (C) The expending of any community funds by a spouse in that spouse's capacity as a fiduciary of the trust creating the remainder interest relative to the operation or maintenance of property related to a remainder interest is not relevant to or indicative of, and does not effect a transmutation or other conversion of separate property to community property; (D) Any funds expended pursuant to subdivision (27)(C) shall be valid debts of the trust and shall be repaid to the community with appropriate interest; (28) "Reserved power" means a power held by a settlor; (29) "Revocable" as applied to a trust, means revocable by the settlor without the consent of the trustee or a person holding an adverse interest; (30) "Settlor" means a person, including a testator, who creates, or contributes property to, a trust. If more than one (1) person creates or contributes property to a trust, each person is a settlor of the portion of the trust property attributable to that person's contribution except to the extent another person has the power to revoke or withdraw that portion; (31) "Spendthrift provision" means a term of a trust which restrains both voluntary and involuntary transfer of a beneficiary's interest; (32) "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. The term includes an Indian tribe or band recognized by federal law or formally acknowledged by a state; (33) "Successors in interest" means the beneficiaries under the settlor's will, if the settlor has a will, or in the absence of an effective will provision, the settlor's heirs at law; (34) "Terms of a trust" means the manifestation of the settlor's intent regarding a trust's provisions as expressed in the trust instrument or as may be established by other evidence that would be admissible in a judicial proceeding; (35) "This state" means the state of Tennessee; (36) "Trust advisor" means any person described in § 35-15-1201(a) ; (37) "Trust instrument" means an instrument executed by the settlor that contains terms of the trust, including any amendments thereto; (38) "Trust protector" means any person described in § 35-15-1201(a) ; and (39) "Trustee" includes an original, additional, and successor trustee, and a cotrustee.