Also known as: ascertainable standards
Written by attorneys · grounded in primary & secondary sources — see below
A distribution standard in a trust that limits a trustee's discretion to expenditures for a beneficiary's health, education, support, or maintenance. The standard supplies an objective benchmark that courts can enforce and that prevents the power from qualifying as a general power of appointment for tax and creditor purposes.
Albert Allen serves as trustee of a trust for his niece Amber Alonzo. The instrument permits distributions only for Amber's health needs, college tuition, and ordinary living expenses. When Amber requests funds for a luxury vacation, Albert properly refuses because the request falls outside the health, education, support, or maintenance categories.
Ava Adebayo is beneficiary and trustee of a family trust. The instrument lets her invade principal only for her own health, education, support, or maintenance. Because the power is held by a trustee and limited by an ascertainable standard, it does not constitute a power of withdrawal that creditors may reach.
Select any source to read its text and confirm it supports the definition.
Alfred Ashford created a trust naming himself trustee with power to distribute principal for the beneficiaries' health, education, support, or maintenance. After his death the estate successfully argued that the retained power was not a general power of appointment because it was confined to an ascertainable standard, keeping the assets out of his gross estate.
Anika Anand is the beneficiary of a discretionary trust whose trustee may distribute funds only for Anika's health, education, support, or maintenance. A commercial judgment creditor attempts to compel distributions, but the court refuses because the ascertainable standard keeps the interest discretionary and unreachable by ordinary creditors.
The standard is limited to a beneficiary's health, education, support, or maintenance. These four categories supply the objective benchmark that courts and the tax code recognize.
A power limited by an ascertainable standard is not treated as a general power of appointment. The assets therefore avoid inclusion in the trustee-beneficiary's gross estate under sections 2041 and 2514.
No. Even when a standard exists, ordinary commercial creditors cannot force the trustee to make a distribution.
A power exercisable by a trustee and limited by an ascertainable standard is expressly excluded from the definition of power of withdrawal. The beneficiary therefore does not hold a presently exercisable general power that creditors may reach.
…amounts “as they shall deem advisable for his comfortable support and maintenance.” This language has been interpreted to set an ascertainable standard, namely to maintain the life beneficiary “in accordance with the standard of living which was normal for him before he became a beneficiary of the trust.” Woodberry v. Bunker , 359 Mass.…