HB163 Summary: Alabama Uniform Trust Decanting Act

• Establishes the Alabama Uniform Trust Decanting Act, allowing authorized fiduciaries of certain irrevocable or settlor-consent-only revocable trusts to modify trust terms or distribute trust property to other trusts while maintaining the settlor's intent and protecting beneficiaries.

• Authorizes decanting for trusts with expanded distributive discretion, limited distributive discretion, and special-needs trusts, with specific restrictions on adding new beneficiaries, reducing vested interests, and protecting charitable interests.

• Requires authorized fiduciaries to provide written notice at least 60 days before exercising decanting power to settlors, qualified beneficiaries, power holders, other fiduciaries, and the Attorney General; allows earlier exercise if all parties waive the notice period.

• Imposes tax-related limitations to preserve marital deductions, charitable deductions, gift tax exclusions, S-corporation status, generation-skipping transfer tax benefits, and grantor trust status established in the original trust.

• Permits decanting of animal trusts when a protector consents in writing and allows later-discovered property to be directed to either the first or second trust as specified by the fiduciary; becomes effective January 1, 2019.