A Mandatory Distribution, authorized under Texas Trust Code Chapter 113, is a required payout that the trustee must make according to the terms of the trust—typically expressed as fixed ages, fixed amounts, or scheduled intervals. While mandatory distributions reduce creditor protection and can eliminate discretionary safeguards, they are sometimes used intentionally to guarantee that beneficiaries receive funds at predictable milestones—such as reaching adulthood, completing education, or achieving financial independence. Mandatory distributions are most appropriate when the settlor prioritizes certainty and access for the beneficiary over asset-protection concerns.
