S.D. Codified Laws § 55-1-43
This is the official text of S.D. Codified Laws § 55-1-43, part of South Dakota’s Codified Laws — part of the compiled statutory law of South Dakota, published by the state as "Codified Laws." Browse the sections below, each linked to its official government source.
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Discretionary interests
Official statutory text
The following provisions apply only to discretionary interests:
(1) A discretionary interest is neither a property interest nor an enforceable right. It is a mere expectancy;
(2) No creditor may force a distribution with regard to a discretionary interest. No creditor may require the trustee to exercise the trustee's discretion to make a distribution with regard to a discretionary interest;
(3) A court may review a trustee's distribution discretion only if the trustee:
(a) Acts dishonestly;
(b) Acts with an improper motive; or
(c) Fails, if under a duty to do so, to act.
Absent express language to the contrary, in the event that the distribution language in a discretionary interest permits unequal distributions between beneficiaries or distributions to the exclusion of other beneficiaries, the trustee may distribute all of the accumulated, accrued, or undistributed income and principal to one beneficiary in the trustee's discretion.
Regardless of whether a beneficiary has any outstanding creditor, a trustee 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. No trustee is liable to any creditor for paying the expenses of a beneficiary of a discretionary interest.
Source: SL 2007, ch 280, § 20; SL 2009, ch 252, § 11.
(1) A discretionary interest is neither a property interest nor an enforceable right. It is a mere expectancy;
(2) No creditor may force a distribution with regard to a discretionary interest. No creditor may require the trustee to exercise the trustee's discretion to make a distribution with regard to a discretionary interest;
(3) A court may review a trustee's distribution discretion only if the trustee:
(a) Acts dishonestly;
(b) Acts with an improper motive; or
(c) Fails, if under a duty to do so, to act.
Absent express language to the contrary, in the event that the distribution language in a discretionary interest permits unequal distributions between beneficiaries or distributions to the exclusion of other beneficiaries, the trustee may distribute all of the accumulated, accrued, or undistributed income and principal to one beneficiary in the trustee's discretion.
Regardless of whether a beneficiary has any outstanding creditor, a trustee 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. No trustee is liable to any creditor for paying the expenses of a beneficiary of a discretionary interest.
Source: SL 2007, ch 280, § 20; SL 2009, ch 252, § 11.
Status: in_force · Read it on the official government site
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