to 114.725 relating to the elective share of the surviving spouse,

114.600 to 114.725 relating to the elective share of the surviving spouse, shares of distributees abate without any preference or priority as between real and personal property in the following order:

����� (a) Property of the trust not disposed of by the terms of the trust instrument.

����� (b) Residuary gifts, which are gifts paid from the trust after all claims and expenses are paid and all general gifts and specific gifts are distributed under the terms of the trust instrument.

����� (c) General gifts, which are gifts chargeable generally on the trust corpus and which are not distinguishable from other parts of the trust corpus and are not given under the terms of the trust instrument as a gift of a specific thing or of a specified part of the trust corpus.

����� (d) Specific gifts, which are gifts of a specific thing or of a specified part of the trust corpus as described under the terms of the trust instrument and that are capable of identification.

����� (4) A general gift charged on any specific property or fund is considered, for purposes of abatement, to be property specifically given to the extent of the value of the property or fund on which the general gift is charged. Upon the failure or insufficiency of the property or fund on which the general gift is charged, the gift is considered a general gift to the extent of the failure or insufficiency.

����� (5) Abatement within each classification is in proportion to the amounts of property each of the distributees would have received had full distribution of the property been made in accordance with the terms of the trust instrument.

����� (6) Persons to whom the trust instrument gives tangible personal property not used in trade, agriculture or other business are not required to contribute from that property unless the property forms a substantial amount of the total estate and the court specifically orders contribution because of the gift.

����� (7) When the subject matter of a preferred gift is sold or used incident to administration, abatement shall be achieved by appropriate adjustments in, or contribution from, other interests in the remaining assets. [2013 c.529 �26]

����� 130.240 Marital deduction gifts. (1) As used in this section:

����� (a) �Marital deduction� means the federal estate tax deduction allowed for transfers under section 2056 of the Internal Revenue Code, as in effect on January 1, 2008, or the federal gift tax deduction allowed for transfers under section 2523 of the Internal Revenue Code, as in effect on January 1, 2008.

����� (b) �Marital deduction gift� means a transfer of property that the settlor intended to qualify for the marital deduction.

����� (2) If a trust contains a marital deduction gift:

����� (a) The provisions of the trust, including any power, duty or discretionary authority given to a fiduciary, must be construed as necessary to comply with the marital deduction provisions of the Internal Revenue Code.

����� (b) The fiduciary may not take any action or have any power that impairs the tax deduction for the marital deduction gift.

����� (c) The marital deduction gift may be satisfied only with property that qualifies for the tax deduction.

����� (3) If a trust executed before September 12, 1981, indicates the settlor intended that a gift provide the maximum allowable marital deduction, the trust gives the recipient an amount equal to the maximum amount of the marital deduction that would have been allowed as of the date of the gift under federal law as it existed before September 12, 1981, with adjustments for:

����� (a) The provisions of section 2056(c)(1)(B) and (C) of the Internal Revenue Code in effect immediately before September 12, 1981.

����� (b) Reduction of the amount passing under the gift by the final federal estate tax values of any other property that passes under the trust, or by other means, that qualifies for the marital deduction. This paragraph does not apply to qualified terminable interest property under section 2056(b)(7) of the Internal Revenue Code, as in effect on January 1, 2008.

����� (4) If a marital deduction gift is made in trust:

����� (a) The settlor�s spouse is the only beneficiary of income or principal of the marital deduction property as long as the spouse lives. Nothing in this paragraph prevents exercise by the settlor�s spouse of a power of appointment included in a trust that qualifies as a general power of appointment marital deduction trust.

����� (b) Subject to paragraph (d) of this subsection, the settlor�s spouse is entitled to all of the income of the marital deduction property at least once a year, as long as the spouse is alive.

����� (c) The settlor�s spouse has the right to require that the trustee of the trust make unproductive marital deduction property productive or convert it into productive property within a reasonable time.

����� (d) Notwithstanding any provision of ORS chapter 129, upon the death of the settlor�s spouse all remaining accrued or undistributed income from qualified terminable interest property under sections 2056(b)(7) or 2523(f) of the Internal Revenue Code, as in effect on January 1, 2008, passes to the estate of the settlor�s spouse, unless the trust provides a different disposition that qualifies for the marital deduction.

����� (5)(a) Except as provided in paragraph (b) of this subsection, if a trust that makes a marital deduction gift includes a requirement that the settlor�s spouse survive the settlor by a period of more than six months, or contains provisions that could result in a loss of the spouse�s interest in the trust if the spouse fails to survive the settlor by at least six months, the spouse need only survive the settlor by six months to receive the marital deduction gift.

����� (b) If a trust that makes a marital deduction gift includes a requirement that the settlor�s spouse survive a common disaster that results in the death of the settlor, the spouse need only survive until the final audit of the federal estate tax return for the settlor�s estate, if any, to receive the marital deduction gift.

����� (6) A trustee is not liable for a good faith decision whether to make any election referred to in sections 2056(b)(7) or 2523(f) of the Internal Revenue Code, as in effect on January 1, 2008.

����� (7) Subsections (4) and (6) of this section do not apply to a trust that qualifies for the marital deduction under 26 U.S.C. 2056, as described in 26 C.F.R. 2056(c)-2(b)(1), as in effect on January 1, 2008. [Formerly 128.398; 2009 c.275 �14]

CREDITOR�S CLAIMS; SPENDTHRIFT AND DISCRETIONARY TRUSTS

����� 130.300 UTC 501. Rights of beneficiary�s creditor or assignee. To the extent a beneficiary�s interest is not protected by a spendthrift provision, the court may authorize a creditor or assignee of the beneficiary to reach the beneficiary�s interest by garnishment or other execution against present or future distributions to or for the benefit of the beneficiary or by other means. The court may limit the award to such relief as is appropriate under the circumstances. [2005 c.348 �39]

����� 130.305 UTC 502. Spendthrift provision. (1) A spendthrift provision is valid only if the provision restrains both voluntary and involuntary transfer of a beneficiary�s interest.

����� (2) A term of a trust providing that the interest of a beneficiary is held subject to a spendthrift trust, or words of similar import, is sufficient to restrain both voluntary and involuntary transfer of the beneficiary�s interest.

����� (3) A beneficiary may not transfer an interest in a trust in violation of a valid spendthrift provision. Except as otherwise provided in ORS 130.300 to 130.325, a creditor or assignee of a beneficiary may not reach the interest of a beneficiary or a distribution by the trustee before the distribution is received by the beneficiary.

����� (4) A settlement agreement entered into under ORS 130.045 is not, by itself, a transfer in violation of a valid spendthrift provision. [2005 c.348 �40; 2013 c.529 �7]

����� 130.310 UTC 503. Exceptions to spendthrift provisions. (1) As used in this section, �child� means any individual for whose benefit a judgment, court order or administrative order for child support has been entered in any state, country or other jurisdiction.

����� (2) Even if a trust contains a spendthrift provision, the holder of a judgment, court order or administrative order against a beneficiary for support or maintenance of the beneficiary�s child, spouse or former spouse or a judgment creditor who has provided services for the protection of a beneficiary�s interest in the trust, may obtain an order from a court of this state authorizing garnishment or other execution against present or future distributions to or for the benefit of the beneficiary. The court may issue an order authorizing execution against such amount as the court determines to be equitable under the circumstances but not more than the amount the trustee is required to distribute to or for the benefit of the beneficiary. Distributions subject to execution under this subsection include distributions required by the express terms of the trust, such as mandatory payments of income, and distributions the trustee has otherwise decided to make, such as through the exercise of discretion.

����� (3) A spendthrift provision is unenforceable against a claim of this state or the United States to the extent a statute of this state or federal law so provides. [2005 c.348 �41; 2013 c.529 �8]

����� 130.315 UTC 505. Creditor�s claim against settlor. (1) Whether or not the terms of a trust contain a spendthrift provision, except as provided in ORS 130.518:

����� (a) During the lifetime of the settlor, the property of a revocable trust is subject to claims of the settlor�s creditors.

����� (b) A creditor or assignee of the settlor of an irrevocable trust may reach the maximum amount that can be distributed to or for the settlor�s benefit. If an irrevocable trust has more than one settlor, the amount the creditor or assignee of a particular settlor may reach may not exceed the settlor�s interest in the portion of the trust attributable to that settlor�s contribution.

����� (c) If a trust was revocable at the settlor�s death, the property of the trust becomes subject to creditors� claims as provided in ORS 130.350 to 130.450 when the settlor dies. The payment of claims is subject to the settlor�s right to direct the priority of the sources from which liabilities of the settlor are to be paid.

����� (d) Notwithstanding the provisions of paragraph (b) of this subsection, the assets of an irrevocable trust may not be subject to the claims of an existing or subsequent creditor or assignee of the settlor, in whole or in part, solely because of the existence of a discretionary power granted to the trustee by the terms of the trust or any other provision of law to pay the amount of tax owed directly to the taxing authorities or to reimburse the settlor for any tax on trust income or principal that is payable or has been paid by the settlor under the law imposing the tax.

����� (2) For the purpose of creditors� claims, the holder of a power of withdrawal is treated in the same manner as the settlor of a revocable trust to the extent property of the trust is subject to the power. The provisions of this subsection apply to the holder of a power of withdrawal only during the period that the power may be exercised.

����� (3) Upon the lapse, release or waiver of a power of withdrawal, the property of the trust that is the subject of the lapse, release or waiver becomes subject to claims of creditors of the holder of the power only to the extent the value of the property exceeds the greatest of:

����� (a) The amount specified in section 2041(b)(2) or 2514(e) of the Internal Revenue Code, as in effect on December 31, 2012;

����� (b) The amount specified in section 2503(b) of the Internal Revenue Code, as in effect on December 31, 2012; or

����� (c) Twice the amount specified in section 2503(b) of the Internal Revenue Code, as in effect on December 31, 2012, if the donor was married at the time of the transfer to which the power of withdrawal applies.

����� (4) The assets of an irrevocable trust that are attributable to a contribution to an inter vivos marital deduction trust described in section 2523(e) or (f) of the Internal Revenue Code, as in effect on December 31, 2012, after the death of the spouse of the settlor of the inter vivos marital deduction trust shall be deemed to have been contributed by the settlor�s spouse and not by the settlor.

����� (5) The assets of an irrevocable trust for the benefit of a person, including the settlor, are not subject to claims of creditors of the settlor to the extent that the property of the trust is subject to a presently exercisable general power of appointment held by a person other than the settlor.

����� (6) Subsections (2) and (3) of this section do not apply to a person other than a settlor who is a beneficiary of a revocable or irrevocable trust and who is also a trustee of the trust, if the power to withdraw for the person�s own benefit is limited by an ascertainable standard. [2005 c.348 �42; 2013 c.529 �9; 2017 c.17 �5; 2021 c.272 �8]

����� 130.320 UTC 506. Overdue distribution. Whether or not a trust contains a spendthrift provision, a creditor or assignee of a beneficiary may reach a mandatory distribution of income or principal, including a distribution upon termination of the trust, if the trustee has not made the distribution to the beneficiary within a reasonable time after the designated distribution date. [2005 c.348 �43]

����� 130.325 UTC 507. Personal obligations of trustee. Trust property is not subject to personal obligations of the trustee, even if the trustee becomes insolvent or bankrupt. [2005 c.348 �44]

CLAIMS AGAINST TRUST BASED ON DEBTS OF SETTLOR

����� 130.350 Statute of limitations. (1) Claims against a trust described in subsection (2) of this section that are not presented within the time limitations established under ORS 130.360 or within the statute of limitations applicable to the claim, whichever is earlier, are barred from payment from the trust estate.

����� (2) ORS 130.350 to 130.450 apply only if:

����� (a) A claim is made against assets of a trust;

����� (b) The trust came into existence during the settlor�s lifetime and was a revocable trust at any time after the trust was created and before the death of the settlor;

����� (c) The claim is based on the debts or liabilities of the settlor; and

����� (d) The claim is made against the assets of the trust after the death of the settlor.

����� (3) ORS 130.350 to 130.450 apply to all claims against a trust described in subsection (2) of this section, without regard to whether the claims are contingent, unliquidated or not yet due. [Formerly 128.256]

����� 130.355 Commencement of proceeding. (1) At any time after the death of a settlor of a trust described in ORS