Discretionary Interests — Effect Thereof

1. Law
2. Tennessee Code
3. Fiduciaries and Trust Estates
4. Tennessee Uniform Trust Code
5. Creditor's Claims — Mandatory, Support and Discretionary Interests — Effect of Spendthrift Provision
6. Discretionary Interests — Effect Thereof

1. A discretionary interest is neither a property interest nor an enforceable right; it is a mere expectancy.
2. Relative to a discretionary interest, whether or not a trust contains a spendthrift provision:
   1. No creditor or assignee shall force or otherwise reach a distribution with regard to a discretionary interest;
   2. No creditor or assignee shall require a trustee, cotrustee or other fiduciary to exercise the trustee's, cotrustee's or other fiduciary's discretion to make a distribution with regard to a discretionary interest;
   3. Regardless of whether a beneficiary has any outstanding creditors or assignees, a trustee, cotrustee or other fiduciary of a discretionary interest may directly pay any expense on behalf of such beneficiary and may exhaust the income and principal of the trust for the benefit of such beneficiary;
   4. No trustee, cotrustee or other fiduciary is liable to any creditor or assignee for paying the expenses of a beneficiary of a discretionary interest;
   5. 1. Regardless of whether a beneficiary holding a discretionary interest is also a trustee, cotrustee or other fiduciary, subdivisions (b)(1)-(4) remain applicable if:
         1. The beneficiary-fiduciary does not have the discretion to make or participate in making distributions to such beneficiary-fiduciary;
         2. The beneficiary-fiduciary's discretion to make or participate in making distributions to such beneficiary-fiduciary is limited by an ascertainable standard; or
         3. The beneficiary-fiduciary's discretion to make or participate in making distributions to such beneficiary-fiduciary is exercisable only with the consent of a cotrustee or another person holding an adverse interest.
      2. A creditor or assignee may compel or otherwise reach a distribution only to the extent the creditor or assignee may compel or otherwise reach a distribution if the beneficiary was not acting as a trustee, cotrustee or other fiduciary.

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