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Current as of January 02, 2024 | Updated by Findlaw Staff
Sec. 14. (a) The following rules apply only to discretionary interests (as defined in section 14.5 of this chapter):
(1) A discretionary interest is a mere expectancy that is neither a property interest nor an enforceable right.
(2) A creditor may not:
(A) require a trustee to exercise the trustee's discretion to make a distribution; or
(B) cause a court to foreclose a discretionary interest.
(3) A court may review a trustee's distribution discretion only if the trustee acts dishonestly or with an improper motive.
(b) Words such as sole, absolute, uncontrolled, or unfettered discretion dispense with the trustee acting reasonably.
(c) Absent express language to the contrary, if the distribution language in a discretionary interest permits unequal distributions between beneficiaries or distributions to the exclusion of other beneficiaries, a trustee may, in the trustee's discretion, distribute all of the accumulated, accrued, or undistributed income and principal to one (1) beneficiary to the exclusion of the other beneficiaries.
(d) Regardless of whether a beneficiary has any outstanding creditors, a trustee of a discretionary interest may directly pay any expense on behalf of the beneficiary and may exhaust the income and principal of the trust for the benefit of the beneficiary. A trustee is not liable to a creditor for paying the expenses of a beneficiary who holds a discretionary interest.
Cite this article: FindLaw.com - Indiana Code Title 30. Trusts and Fiduciaries § 30-4-2.1-14 - last updated January 02, 2024 | https://codes.findlaw.com/in/title-30-trusts-and-fiduciaries/in-code-sect-30-4-2-1-14/
FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. Please verify the status of the code you are researching with the state legislature before relying on it for your legal needs.
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