A distributive clause in a will or trust dictates the distribution of money or gifts, specifying who receives what and when. In the event that the person responsible for distributing the assets needs to alter the rules, it is referred to as a distributive deviation. Permission from the court is required to make such changes, typically granted only if all beneficiaries consent and if the creator of the will or trust did not have significant reasons for the original rules. However, in unforeseen circumstances, the court may allow the person in charge to modify the rules against the wishes of the creator.
A distributive clause in a will or trust determines how income and gifts are distributed. For instance, a will may specify that a certain percentage of the estate’s income should be given to a specific beneficiary annually. Distributive deviation occurs when a trustee deviates from the explicit distribution terms of a trust, either with or without authorization. For example, a trustee may request court approval to deviate from the trust’s terms if all beneficiaries agree and there is no remaining purpose of the settlor to be fulfiled. In certain cases, deviation may be allowed if the court determines that it aligns with the settlor’s intention, even if not explicitly authorized by the trust. The Pulitzer trust provides an example of distributive deviation, as the court permitted the sale of World newspaper stock despite a prohibition in the trust. The court justified this decision by stating that the trust’s continuation was at risk due to significant losses, and selling the stock was necessary to preserve the trust’s purpose.
A distributive clause is a legal provision that specifies how a particular benefit or obligation is to be distributed among multiple parties.
While a collective clause treats a group as a single entity, a distributive clause treats each member of the group individually and assigns benefits or obligations to each member separately.
Yes, a distributive clause can be included in a contract to ensure that benefits or obligations are allocated fairly among the parties involved.
The factors considered may vary depending on the specific context, but common considerations include the parties’ contributions, needs, or any other relevant criteria agreed upon by the parties.
Yes, a distributive clause can be modified or waived if all parties involved agree to the changes and document them in writing.
If a distributive clause is not included in a contract, the distribution of benefits or obligations may be subject to interpretation or dispute, potentially leading to conflicts between the parties involved.
Yes, a distributive clause can be challenged in court if one party believes that the distribution is unfair or violates any applicable laws or regulations.
While distributive clauses generally provide flexibility in determining the distribution, they must still comply with any applicable laws, regulations, or public policy considerations.
If a distributive clause is deemed unfair or unconscionable by a court, it may be unenforceable, and the court may order a different distribution or invalidate the clause altogether.
It is highly recommended to consult a lawyer when drafting or interpreting a distributive clause to ensure that it aligns with your specific legal needs and objectives. A lawyer can provide guidance and help you navigate any potential legal complexities.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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