SB343 Summary

• Amends Alabama Principal and Income Act to define "unitrust amount" as a percentage (3-5% of net fair market value) of trust assets determined annually or averaged over multiple years, consistent with federal Treasury Regulations.

• Authorizes trustees to convert existing trusts into unitrusts if conversion enables better execution of settlor's intent, with written notice to qualified beneficiaries and a 60-day objection period.

• Allows qualified beneficiaries to convert trusts to unitrusts by written instrument with trustee consent, or permits either party to petition courts for conversion orders even if beneficiaries object or sui juris beneficiaries are absent.

• Prohibits conversions that would change fixed annuities, affect charitable interests with tax deductions, or trigger adverse income/estate tax consequences for beneficiaries or trustees.

• Clarifies that Alabama Uniform Trust Code provisions apply to Principal and Income Act except where inconsistent, and becomes effective the first day of the third month following passage.