Section 7-1.5. When trust interest inalienable; exception

(a)  The  interest  of the beneficiary of any trust may be assigned or
  otherwise transferred, except that:
    (1) The right of a beneficiary of an  express  trust  to  receive  the
  income  from property and apply it to the use of or pay it to any person
  may not be transferred by assignment or  otherwise  unless  a  power  to
  transfer  such  right,  or  any  part  thereof,  is  conferred upon such
  beneficiary by the instrument creating or declaring the trust.
    (2) The proceeds of a life insurance policy which, under  a  trust  or
  other  agreement,  are  upon  the  death  of  the  insured left with the
  insurance company may not be (A) transferred, (B) subject to commutation
  or encumbrance or (C) subject to legal process except in an  action  for
  necessaries,  if  provisions  to  such  effect were incorporated in such
  trust or other agreement.
    (b) Notwithstanding subparagraph (a) (1):
    (1) The beneficiary  of  an  express  trust  to  receive  income  from
  property  and apply it to the use of or pay it to any person may, unless
  otherwise provided in the instrument creating or declaring  such  trust,
  transfer  any  amount  in  excess  of ten thousand dollars of the annual
  income to which the beneficiary is  entitled  from  such  trust  to  the
  spouse,  issue,  ancestors, brothers, sisters, uncles, aunts, nephews or
  nieces of the beneficiary, or  to  a  trustee,  committee,  conservator,
  curator, custodian, guardian of the property of a minor, or the donee of
  a  power during minority for the benefit only of any such person bearing
  such relationship to the beneficiary, provided  that  such  transfer  is
  evidenced  by  a  written  instrument  signed  and  acknowledged  by the
  beneficiary and delivered to the trustee of the trust, together with  an
  affidavit  by  the  beneficiary that such transfer and any like transfer
  concurrently in effect are for all  or  part  of  the  excess  over  ten
  thousand  dollars  of  the  annual  income from such trust to which such
  beneficiary is entitled, and that he has not  received  and  is  not  to
  receive any consideration in money or money's worth for the transfer.
    (2) Any such transfer shall be effective in any year only as to income
  from  such trust in excess of ten thousand dollars, and for this purpose
  all previous like transfers applicable to a given year  shall  be  taken
  into account. In the event that two or more transfers are made in or for
  any year in a total amount exceeding the income from such trust properly
  transferable  hereunder,  transferees shall be preferred in the order in
  which the instruments of transfer were delivered to the trustee.
    (3) A trustee shall be exonerated and fully discharged for any payment
  made to a transferee in reliance  on  the  affidavit  of  a  beneficiary
  described in subparagraph (1).
    (4)  The provisions of this paragraph do not apply to subparagraph (a)
  (2):
    (c) A transferee of income may, if he has not received or  is  not  to
  receive  any  consideration  in  money or money's worth therefor, make a
  further transfer of such income only to one or more of  the  permissible
  transferees  referred  to  in  subparagraph  (b) (1), other than a prior
  transferor; provided, however, that upon the death of a  transferee  any
  income  not  so  transferred  by  him  shall  be an asset of his estate,
  subject to his testamentary disposition or passing to  his  distributees
  under the statutes of descent and distribution.
    (d)  The  beneficiary  of  an express trust to receive the income from
  property and apply it to the use of or pay  it  to  any  person  is  not
  precluded  by  anything  contained  in this section from transferring or
  assigning any part or all of such  income  to  or  for  the  benefit  of
  persons whom the beneficiary is legally obligated to support.