Power to restrain transfer of a beneficiary's interest
Sec. 2. (a) The settlor may provide in the terms of the trust that
the interest of a beneficiary may not be either voluntarily or
involuntarily transferred before payment or delivery of the interest
to the beneficiary by the trustee.
(b) Except as otherwise provided in subsection (c), if the settlor
is also a beneficiary of the trust, a provision restraining the voluntary
or involuntary transfer of his beneficial interest will not prevent his
creditors from satisfying claims from his interest in the trust estate.
(c) Subsection (a) applies to a trust that meets both of the
following requirements, regardless of whether or not the settlor is
also a beneficiary of the trust:
(1) The trust is a qualified trust under 26 U.S.C. 401(a).
(2) The limitations on each beneficiary's control over the
beneficiary's interest in the trust complies with 29 U.S.C.
1056(d).
(d) A trust containing terms authorized under subsection (a) may
be referred to wherever appropriate as a trust with protective
provisions.
(Formerly: Acts 1971, P.L.416, SEC.4.) As amended by
P.L.287-1987, SEC.2.
Last modified: May 27, 2006