Implant Does Not Qualify as “Emergency” Distribution From Trust

A family patriarch created a trust for his children and grandchildren’s benefit. The trust allowed the trustee to invade corpus for the “reasonable support” of the four named beneficiaries or to cover “sickness” or “other emergency” costs of the beneficiaries.

The corporate trustee created a trust committee that required beneficiaries to submit a written request when he or she wished to receive a discretionary distribution. The trust committee required that the written request include an explanation of the amount needed and the reason for its need.

A few years ago, a beneficiary under the trust sent the trust officer a request for a discretionary distribution. In detail, the beneficiary explained that he needed the money for an emergency penile implant. After receiving the request, the trust officer presented the request to the trust committee, perhaps in a similar manner as below.

Committee Member: In your opinion Ms. Smith, does his condition rise to the level of an emergency?

Trust Officer: Sir, I am not qualified to comment, but the length of his request does make his case compelling?

Committee Member: We need more information. Is there a doctor’s opinion with the request? How could this be an emergency?

Trust Officer: I wouldn’t know. I can ask the doctor for more information. What more should I ask for? Diagrams?

Committee Member: Well, we need some proof that this is an emergency.

Trust Officer: If not an emergency, could it qualify under the “reasonable support” clause?

Diagrams and demonstrations were (thankfully) never presented. The trust committee did not approve the distribution.

Implant Denied as “Emergency” Distribution From Trust, The Mississippi Fiduciary, Jun. 10, 2011.