Discretionary trusts; effect of standard.

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3B:31-38 Discretionary trusts; effect of standard.

3B:31-38. Discretionary Trusts; Effect of Standard.

a. 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:

(1) The discretion is expressed in the form of a standard of distribution; or

(2) The trustee has abused the discretion.

b. 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.

c. With respect to the powers set forth in section 1 of P.L.1996, c.41 (C.3B:11-4.1), the provisions of this section shall apply even though the beneficiary is the sole trustee or a co-trustee of the trust.

L.2015, c.276, s.1.


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