HB293 Summary

• Creates the Alabama Qualified Dispositions in Trust Act to establish a framework for transfers of property to trusts with specific protections for transferors and limitations on creditor rights.

• Defines a "qualified disposition" as a transfer to one or more qualified trustees (Alabama residents or authorized organizations) where the transferor retains only specified powers including directing investments, vetoing distributions, receiving income, and removing/appointing trustees.

• Restricts creditor actions against qualified dispositions to cases of actual intent to defraud (for post-disposition claims), with a 2-year statute of limitations for pre-disposition claims and concurrent limitations for post-disposition claims.

• Requires transferors to execute a qualified affidavit before disposition confirming full authority to transfer, no insolvency, no fraud intent, and no pending litigation or child support arrears exceeding 30 days.

• Protects trust beneficiaries by prohibiting their creditors from attaching or executing against trust interests and requiring trustees to oppose involuntary transfers of beneficiary interests.