Indiana Code 30-4-2.1-14. Rules of interpretation concerning discretionary interests
(1) A discretionary interest is a mere expectancy that is neither a property interest nor an enforceable right.
Terms Used In Indiana Code 30-4-2.1-14
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Beneficiary: has the meaning set forth in IC 30-2-14-2. See Indiana Code 30-4-1-2
- Court: means a court having jurisdiction over trust matters. See Indiana Code 30-4-1-2
- Income: except as otherwise stated in a trust agreement, has the meaning set forth in IC 30-2-14-4. See Indiana Code 30-4-1-2
- Principal: has the meaning set forth in IC 30-2-14-10. See Indiana Code 30-4-1-2
- Property: includes personal and real property. See Indiana Code 1-1-4-5
- Trustee: A person or institution holding and administering property in trust.
- Trustee: has the meaning set forth in IC 30-2-14-13. See Indiana Code 30-4-1-2
(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.
As added by P.L.6-2010, SEC.14. Amended by P.L.36-2011, SEC.7; P.L.6-2012, SEC.202.