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AL SB179
Bill
Status
1/20/2026
Primary Sponsor
Will Barfoot
Click for details
AI Summary
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Amends the Alabama Uniform Trust Code to align creditor claims against irrevocable trusts with the limits established in the Alabama Qualified Dispositions in Trust Act (Chapter 3E)
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Beneficiaries holding withdrawal powers in irrevocable trusts will no longer be treated as settlors upon lapse of the power, changing the previous rule that applied federal Internal Revenue Code safe harbor thresholds
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Trustees may reimburse settlors for income taxes paid on trust income without those reimbursements being subject to claims by the settlor's creditors
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Persons who become trust beneficiaries through another's exercise of a power of appointment will not be considered settlors of the trust
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Effective October 1, 2026, applying to all trusts under Section 19-3B-1204
Legislative Description
Alabama Uniform Trust Code; amended to conform with Alabama Qualified Dispositions in Trust Act, limit property subject to creditors' claims
Property & Estates
Last Action
Read for the Second Time and placed on the Calendar
2/25/2026