CA AB1866

Prohibits a settlor from being considered a beneficiary of an irrevocable trust they created solely because the trustee has discretionary authority to pay or reimburse the settlor's federal or state income taxes on trust income or principal.

Prevents transferees or creditors of the settlor from reaching trust amounts based solely on the trustee's discretionary authority to pay the settlor's income tax liabilities.

Maintains existing law that invalidates restraints on transfer of a settlor's interest in trusts where the settlor is a beneficiary.

Preserves existing creditor rights to reach trust amounts when trustees have discretion to pay income or principal for the settlor's education, support, or other purposes under the trust instrument.