Oklahoma § 60-175.85 - Spendthrift provision

§ 60-175.85. Spendthrift provision

A. A spendthrift provision is valid if it restrains either the

voluntary or involuntary transfer of a beneficiary’s interest. If

the applicable trust instrument so provides, a spendthrift provision

may permit the voluntary transfer of an interest of a beneficiary

even if the transfer is subject to the approval by the trustee if

the trustee is not also the transferring beneficiary. The trustee

may honor a transfer even if the transfer violates a spendthrift

provision. The trustee shall not be liable to either the

beneficiary or the assignee whether or not the trustee honors the

transfer.

B. If a trust provides that the interest of a beneficiary is

held subject to a spendthrift provision, or words of similar import,

it shall restrain both the voluntary or involuntary transfer of the

interest of the beneficiary.

C. Except for an exception creditor of a support interest under

paragraph 4 of Section 8 of this act, if a trust contains a

spendthrift provision, a creditor or assignee of the beneficiary may

not reach an interest in a trust or a distribution by the trustee

until such distribution is received by the beneficiary.

D. A creditor shall wait until a distribution is received by a

beneficiary before attachment; provided, however, an exception

creditor may attach current and future distributions at the trust

level.

E. A spendthrift provision applies to both current distribution

interests, future distribution interests, and remainder interests.

Oklahoma Statutes - Title 60. Property

F. A power of appointment in any trust is personal in nature

and cannot be attached or forced to be exercised by a creditor or a

court regardless of the presence of a spendthrift provision. A

power of appointment is not a property interest.

G. A reserved power is not protected by a spendthrift

provision. If a reserved power does not constitute a power of

withdrawal for the settlor to withdraw income or principal, the

holder of a reserved power may exercise the power in the sole and

absolute discretion of the holder unencumbered by any court.

H. A spendthrift provision is a material provision of a trust.

Added by Laws 2010, c. 280, § 5, eff. Nov. 1, 2010.