AR SB260

Amends Arkansas Code § 28-73-505 to clarify creditor claims against trust settlors in both revocable and irrevocable trusts, limiting creditor reach to a settlor's proportionate interest in multi-settlor trusts.

Modifies provisions regarding powers of withdrawal by stating that upon lapse, release, or waiver of such power, the holder is not treated as a settlor of the trust by reason of that power.

Exempts property contributed to certain irrevocable trusts from being deemed as settlor contributions, including qualified terminable interest property trusts and general power of appointment trusts where the settlor is a beneficiary after the spouse's death.

Excludes from settlor attribution irrevocable trusts where trust property was subject to a general power of appointment held by another person.

Defines beneficiary status to include persons named in the trust instrument or those gaining interest through limited or general powers of appointment exercised by spouses or other persons.