Section 506: Overdue distribution
[Text of section applicable as provided by 2012, 140, Sec. 66.]
Section 506. Overdue distribution
(a) In this section, ''mandatory distribution'' shall mean a distribution of income or principal which the trustee is required to make to a beneficiary under the terms of the trust, including a distribution upon termination of the trust. ''Mandatory distribution'' shall not include a distribution subject to the exercise of the trustee's discretion even if: (1) the discretion is expressed in the form of a standard of distribution; or (2) the terms of the trust authorizing a distribution couple language of discretion with language of direction.
(b) Whether or not a trust contains a spendthrift provision, a creditor or assignee of a beneficiary may reach a mandatory distribution of income or principal, including a distribution upon termination of the trust, if the trustee has not made the distribution to the beneficiary within a reasonable time after the designated distribution date.