2005 Arizona Revised Statutes - Revised Statutes §14-7704  Transferee or creditor of beneficiary; power to compel trustee to pay; liability of trustee to creditor

A. If a trust instrument allows the trustee to exercise discretion in the use of income or principal, a transferee or creditor of the beneficiary may not compel the trustee to pay an amount that may be paid only in the exercise of his discretion.

B. If the trustee has knowledge of the transfer of the beneficiary's interest or is served with process in a proceeding by a judgment creditor seeking to reach the beneficiary's interest and the trustee pays to or for the benefit of the beneficiary any part of the income or principal that may be paid only in the exercise of his discretion, the trustee is liable to the transferee or creditor to the extent that the payment to or for the benefit of the beneficiary impairs the right of the transferee or creditor. The provisions of this subsection do not apply if the beneficiary's interest in the trust is subject to a restraint on transfer that is valid pursuant to this article.