Classifications of distribution interests

1. A distribution interest may be classified as: (a) A mandatory interest if the trustee has no discretion to determine whether a distribution should be made, when a distribution should be made or the amount of the distribution. (b) A support interest if the trustee is mandatorily required to make distributions to the beneficiary upon the determination of the trustee that the distribution will satisfy a defined ascertainable standard set forth in the instrument and, upon such a determination, the trust instrument does not otherwise condition such distribution authority on the further discretion of the trustee. (c) A discretionary interest if the trustee has discretion to determine whether a distribution should be made, when a distribution should be made and the amount of the distribution. 2. If a trust contains a combination of a mandatory interest, a support interest or a discretionary interest, the trust must be separated as: (a) A mandatory interest only to the extent of the mandatory language provided in the trust; (b) A support interest only to the extent of the support language provided in the trust; and (c) A discretionary interest for any remaining trust property. 3. If a trust provides for a support interest that also includes mandatory language but the mandatory language is qualified by discretionary language, the support interest must be classified and separated as a discretionary interest. 4. As used in this section, “ascertainable standard” means a standard relating to a person’s health, education, support or maintenance within the meaning of section 2041(b)(1)(A) or 2514(c)(1) of the Internal Revenue Code, 26 U.S.C. § 2041(b)(1)(A) or 2514(c)(1), and any regulations of the United States Treasury promulgated thereunder.